Involve.ai Inc., a startup using artificial intelligence to help enterprises improve their customer retention rates, today announced that it has closed a $16 million funding round led by Sapphire Ventures.

Greycroft, Stanford University and more than a half-dozen other investors participated in the round as well. The funding follows 12 months of rapid growth for Involve.ai. The startup disclosed today it has added 22,000 users over the past year and increased revenue nearly fivefold off an undisclosed base. 

Los Angeles-based Involve.ai provides a cloud platform that helps companies identify when users are looking at stopping purchases of their products or services. According to the startup, its platform determines when customers are longer interested in an offering with the help of AI algorithms trained on over 120 million data points. Involve.ai claims that the software predicts customer churn with an average accuracy of 94%.

The startup’s algorithms estimate the probability of churn based on several pieces of business data they collect from a company’s internal systems. The algorithms analyze how often a customer is using a product, the number of support tickets they open, the severity of those tickets and various other factors.

Involve.ai says that the insights provided by its platform helps companies find users who are planning to switch to competing products and take steps to improve their customer experience. By implementing changes to reduce the number of customers who leave, firms can increase long-term revenue.

Involve.ai argues that it’s solving a major technical challenge for enterprises. Historically, estimating the probability of customer churn required companies to run manual analyses, which are difficult to carry out for several reasons. 

One source of complexity is that estimating churn often requires writing custom code to carry out the necessary calculations. Another challenge is that the data points needed to estimate churn likelihood, such as the number of support tickets a customer submits and how often they interact with a product, are often scattered across different software applications. As a result, companies have to move the records into a centralized environment before analysis can begin, which is difficult when large volumes of information are involved.

There are often other additional steps involved as well. Most notably, companies must filter any errors that may be contained in their datasets to ensure the churn analysis will produce accurate results. 

Involve.ai says that its platform automates the process. According to the startup, its AI algorithms take one week to collect and organize the data points necessary to calculate churn probability from a company’s systems of record. Once the initial data preparation is complete, the platform can start generating churn probability estimates within a few days.

Involve.ai focused on the employee engagement market when it launched in 2016. The startup’s current flagship product, its customer retention optimization platform, is based on algorithms that were originally developed for internal use to reduce churn among its own users. Involve.ai refocused entirely on helping companies boost customer retention last year.

“Since we launched, we have grown 40% MoM and have added 22,000 users to the platform,” Involve.ai co-founder and Chief Executive Officer Gaurav Bhattacharya wrote in a blog post. “Our goal is to get to 200,000 users by 2022. The new funding will enable us to fulfill strong market demand for our customer intelligence platform by investing heavily in our product, engineering, and AI teams. It will also accelerate our product roadmap to establish market leadership, expand go-to-market teams and improve customer experience.”

Involve.ai says its platform also lends itself to another use case besides increasing customer retention: finding new sales opportunities. Using the AI techniques it uses to predict churn, the startup can help companies determine when their users may be interested in purchasing another product.

Involve.ai has raised $18.5 million from its investors to date. 

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