UPDATED 16:27 EDT / NOVEMBER 30 2020

CLOUD

Facebook acquires customer service startup Kustomer for reported $1B+

Facebook Inc. has acquired Kustomer Inc., a heavily funded startup with a cloud service that companies use to field customer inquiries.

The financial terms of the deal were not disclosed. However, CNBC and other publications reported that the transaction values Kustomer at just over $1 billion.

New York-based Kustomer raised more than $170 million from noted backers such as Cisco Investments and Coatue prior to the acquisition. The startup’s namesake service enables help desk agents to reply to customer inquiries that their companies receive via Instagram, WhatsApp, Twitter, email and other online channels in a single centralized console. The same console also gives agents access to information such as purchase details that they may need to answer requests.

Kustomer says that centralizing the entire workflow in a single view removes the need to open multiple tabs, thereby increasing productivity.

For Facebook, the startup’s artificial intelligence features may have also been a factor behind the acquisition. Kustomer uses AI to analyze customer messages and generate recommended replies that save time for help desk personnel. The service is capable of answering certain simple questions, such as product pricing inquiries, on a fully automated basis thanks to built-in chatbots.

The technology Facebook is obtaining through the acquisition will give it another way to support businesses that use its platforms to interact with their customers. More than 175 million people communicate with businesses through WhatsApp alone, Facebook executives Dan Levy and Matt Idema noted in a blog post detailing the acquisition today. 

“We want businesses of all sizes and across all industries to discover the value of messaging” Levy and Idema wrote. As part of the plan, they elaborated, Facebook will assist the Kustomer team with expanding its platform’s feature set. 

Kustomer Chief Executive Officer Brad Birnbaum wrote in a separate blog post that “once the acquisition closes, we look forward to working closely with Facebook, where we will continue to serve our customers and work with our partners as part of the Facebook family.” That seems to suggest Kustomer’s service will continue to be available to customers in its current form at the least for the foreseeable future.

Kustomer is the latest addition to the growing roster of tools Facebook offers to businesses. Previously, it introduced a product called Business Suite that enables companies to centrally manage their Facebook, Messenger and Instagram pages. 

Photo: Facebook

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