SaaS firm Zendesk launches venture fund to fuel AI startups

US-based SaaS company Zendesk has launched Zendesk Ventures, a global venture fund aimed at supporting early-stage, AI-first startups. 

The fund focuses on startups enhancing customer and employee experiences through advanced artificial intelligence (AI) solutions. 

Beyond providing capital, Zendesk Ventures offers access to CX (customer experience) and AI experts, strategic partnerships, and the opportunity for startups to be featured on the Zendesk Marketplace.

Who are the initial beneficiaries?

Zendesk Ventures has already invested in two notable companies: PolyAI and unitQ.

PolyAI develops advanced conversational voice assistants that handle complex customer interactions such as order tracking and delivery updates, mimicking human conversation to enhance customer service efficiency and reduce call volumes.

unitQ, on the other hand, is an AI-powered product quality platform that collects and analyzes customer feedback from over 60 sources in real-time to identify and resolve user issues, thus improving Net Promoter Scores (NPS).

Why is Zendesk venturing into AI investments?

The move to establish Zendesk Ventures aligns with the broader trend among B2B tech firms to stay at the forefront of AI innovation.

Ben Barclay, Zendesk’s SVP of Strategy, Corporate Development, and Transformation, said, "Every organization is on a path to becoming AI-driven, and we’re eager to form partnerships with companies leading this new era. Our goal extends beyond building our own products; we’re also supporting an ecosystem of startups whose visions align with ours."

"Customer and employee service is changing rapidly because of advancements in AI. Investing in these companies does more than drive their growth, it elevates our customers’ ability to provide exceptional interactions," Barclay added.

Focusing on seed and Series A round

Zendesk Ventures will focus on seed and some Series A rounds, investing from half a million dollars to several million per deal.

The fund targets companies working on customer service or related areas, with a particular interest in those focused on AI. The startups should either be integrated into Zendesk’s partner marketplace or be willing to do so and have less than $50 million in Annual Recurring Revenue (ARR). 

CEO Tom Eggemeier emphasized that the initiative is not just about financial returns but also about fostering an ecosystem of innovation. "It's not as much about the returns, it's more about putting people into the ecosystem," Eggemeier explained.

The venture arm aims to learn from the startups, expand Zendesk's marketplace of app and partner integrations, and identify potential acquisition targets.

With a significant portion of its budget allocated to this venture fund, Zendesk Ventures is positioned to significantly impact the AI startup landscape.

"With the Make AI in India initiative by the Union government, the AI startup ecosystem is booming in India. Unique value propositions and immense growth potential make AI startups a great investment in India," said Vasudeva Rao Munnaluri, RVP India and SAARC, Zendesk.

Zendesk, founded in 2007 and headquartered in California, aims to integrate the best of AI agents, workflow automation, and human agents to enhance customer and employee experiences.