Genesys Cloud Services Inc., a major provider of customer experience management software, today announced that it has closed a $580 million funding round at a $21 billion valuation.

The venture capital arm of Salesforce.com Inc. led the funding round. The software-as-a-service giant was joined by ServiceNow Ventures, Zoom Video Communications Inc., BlackRock, D1 Capital Partners and an unnamed West Coast-based large mutual fund manager.

The $21 billion valuation that Genesys gained in the funding round represents a win for its major shareholders, investment firms Permira and Hellman & Friedman. Permira became a Genesys investor in 2012 through a deal that valued the customer experience specialist at $1.5 billion, or less than one-10th of what it’s worth today. Hellman & Friedman came aboard in July 2016 by making a $900 million investment that valued Genesys at $3.8 billion.

San Francisco-based Genesys launched in 1990. Through organic growth and acquisitions, the company has built up an extensive portfolio of software products focused on helping enterprises manage customer interactions. Genesys also provides tools for increasing employee productivity.

Genesys’ product portfolio includes software that helps enterprises orchestrate their contact center operations. As part of its feature set, the company offers chatbots that use artificial intelligence to answer common customer questions. For contact center representatives, Genesys provides automated recommendations on the best way to address user requests. 

For sales and marketing teams, in turn, Genesys offers tools that help turn website visitors into paying customers. The company’s software can use historical buyer data to identify the best moments to target potential customers with promotional messages. Genesys also uses this historical data to give enterprises pointers on how they can maximize the chance of users making a purchase.

Another major focus area for Genesys is employee engagement. The company’s product portfolio includes software that enterprises can use to set up an internal help desk for answering employee questions, like inquiries on how to set up a new work computer. For contact center managers, Genesys provides tools that they can use to perform tasks such as analyzing customer support teams’ productivity and delivering employee training.

One factor behind Genesys’ hefty $21 billion valuation is that the company has a sizable installed base of large enterprises. Genesys disclosed today that its software is used by nearly 7,000 organizations worldwide, including 17 of the top 20 Fortune 500 firms.

The company has used its strong market presence to drive significant recurring revenue growth this year. Genesys says that cloud and subscription bookings more than doubled during the six months ended July 31, but didn’t provide absolute numbers. The company’s cloud and subscription business now accounts for 90% of all its new bookings. 

“Two years ago, we saw the challenge businesses faced in meeting the expectations of consumers and employees around digital experiences,” said Genesys Chief Executive Officer Tony Bates (pictured). “We realized we had an opportunity to transform not only our company but the overall industry. We believe this fundraise, including raising from leading strategic investors, validates the achievements we have made to date and will accelerate our continuing efforts to expand.”

Genesys has made a number of acquisitions in recent years to support its growth plans.

Among Genesys’ most recent acquisitions are the purchases of Pointillist and Exceed.ai, which both closed last week. Pointillist is a developer of customer analytics software. Exceed.ai makes tools that help companies turn potential buyers into paying customers. Now that it has an additional $580 million in funding to work with, it’s possible that Genesys will make yet more acquisitions to advance its market expansion plans.

Regardless of what direction the company’s acquisition roadmap takes, artificial intelligence is likely to be a major part of its broader growth strategy. Enterprises are using AI to automate many customer experience management tasks, from delivering shopping recommendations to answering support inquiries.

mid this trend, Genesys has made AI a bigger focus as well: The company recently introduced an offering called Genesys DX that provides machine learning-powered features such as chatbots.

In October, Bloomberg reported that Genesys was preparing to file for an initial public offering at a valuation of up to $20 billion. Given that Genesys is now worth $21 billion, the IPO will likely be held at a higher valuation than the company originally planned. The October report indicated that Genesys was aiming to go public in the first half of 2022. 

Photo: Genesys