Artificial intelligence startup DigitalGenius raises $3M to help companies automate customer service

Artificial intelligence (AI) startup DigitalGenius has announced its first venture capital funding, nabbing $3 million in a round led by Metamorphic Ventures, with participation from Lerer Hippeau Ventures, Lowercase Capital, RRE Ventures, Lumia Capital, and a handful of “strategic” angel investors.

The New York-based company’s platform automates question-and-answer conversations, perfect for companies that want to offer a text-based customer support service without requiring actual people. Tapping a multitude of data sources, DigitalGenius’ technology uses machine learning and natural language processing (NLP) that tries to replicate “friendly” human-like attributes.

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DigitalGenius already counts the likes of Unilever, BMW, and a number of banks as clients, but with $3 million more in its coffers, the startup can ramp up growth and “productize its AI offerings and transform the way brands communicate with consumers at scale,” according to a press release.

We’ve seen a huge spurt in AI initiatives of late, from startups and major tech companies alike. In the past month alone, Nervana Systems — a startup that’s building intelligent systems to help companies build smarter apps — announced a $20.5 million raise. This closely followed the news that Atomwise, a startup that relies on “deep learning” to identify drug candidates, raised $6 million. Elsewhere, Facebook revealed it was expanding its AI research division into Europe with a new office in Paris, while at the end of May Google touted huge improvements with its speech-recognition technology, reporting an impressive 8 percent error rate, down from 23 percent in 2013.

But why would a company want a machine running its customer support?

“With the proliferation of NLP and AI, more and more applications will be built that solve consumer pain points,” explained David Hirsch, cofounder and general partner of Metamorphic Ventures. “The DigitalGenius team has built an amazing platform that enterprise customers and brands can leverage to increase customer satisfaction and reduce labor costs. I can’t wait to live in a world where interacting with the cable company is actually a pleasurable experience.”

The myriad of benefits attached to AI technology are evident. Broadly, it can help tackle huge problems — such as fighting disease — at a rate that humans could simply not manage. On a more direct, practical level, it can help companies cut labor costs. While this has led many to speculate what will happen to society when robots replace human workers, the more immediate appeal of increased efficiency and reduced salaries is too tempting for companies to ignore.