Sierra Technologies Inc.a hot artificial intelligence startup co-founded by former Salesforce Inc. co-CEO Bret Taylor, announced today that it has closed on a $175 million funding round this brings its valuation to $4.5 billion.

The round was led by Greenoaks Capital and saw participation from Thrive Capital and Iconiq, and confirms a report earlier this month by The Information that the company was engaged in negotiations with investors.

Sierra is an AI startup that helps companies such as WeightWatchers International Inc., audio equipment company Sonos Inc. and home security company ADT Inc. implement proactive virtual assistants for customer service roles.

The startup’s technology is based on a conversational AI model that allows it to engage in natural language conversations with customers. It also has the ability to “see” and understand a company’s own business data, allowing its AI agents to be context-aware of how they might solve customer problems. For example, if a caller wants to know what time a store is open, asks where it is, or requests a ticket to return an item, they can dig through the company’s knowledge base to find the answers.

By taking action on behalf of customers, Sierra chatbots can reduce the number of instances where calls must be escalated to a real human agent for resolution.

In addition to its agentic AI capabilities, Sierra also differentiates itself in the way customers can personalize their customer service bots. For example, the clothing company Chubbies Inc. chose to create a young and hip agent with the slightly sarcastic name Duncan Smothers. Meanwhile, other brands have opted for AI agents with British accents and a more serious tone.

In an interview with CNBC, Taylor said the idea behind this level of personalization is that conversational AI agents should not only help businesses, but also act as a sort of brand ambassador. “It’s actually something that represents a statement of your values,” he explained. “So, you want to be sarcastic? Do you want to use emoji? Do you want it to look like a text message or do you want it to look like a lawyer? »

Another thing that sets Sierra apart from its competitors is its reliance on a “constellation” of large, well-known language models. Although it primarily uses a single model to do the heavy lifting, no LLM is expected to be 100% reliable and accurate. It therefore uses secondary models as a sort of “backup”, to check the correctness of the first and to help if necessary. Sierra did not specify the exact models it uses, but said they include LLMs from OpenAI, Anthropic PBC and Meta Platforms Inc., among others.

Taylor, who previously led Salesforce alongside co-founder Marc Benioff and was chairman of Twitter Inc. when Elon Musk attempted to buy that company, is one of Silicon Valley’s best-known entrepreneurs and has since been interested in long time at AI Technology. He has reportedly been involved in a number of AI initiatives during his tenure at Salesforce and also serves on the board of directors of OpenAI.

Prior to Salesforce, Taylor held a key role at Google LLC, where he was heavily involved in the creation of Google Maps. It was around this time that he met Clay Bavor, another co-founder of Sierra, who was leading the virtual reality efforts at Google.

Prior to today’s round, Sierra had raised $110 million from Sequoia Capital and Benchmark, at a valuation of nearly $1 billion.

With this latest round, Sierra emerges among a growing number of extremely well-funded AI startups, which continue to raise billions of dollars in venture capital despite growing concerns about AI bubbles. OpenAI recently raised $6.6 billion at a valuation of $157 billion, while Perplexity AI Inc. is reportedly in talks over a possible $500 million increase this would bring its value to more than $9 billion.

Start-up valuations are generally based on their growth potential as well as the skills and reputation of their founding team. Sierra’s annual recurring revenue has already crossed the $20 million mark, Reuters reported.

Photo: Sierra