Manychat Secures $140M to Enhance AI-Powered Business Messaging Platform

Manychat taps $140M to boost its business messaging platform with AI

Chatbots and other kinds of AI agents -- and the companies that build them -- may feel like a dime a dozen these days. But the truth is that, for both businesses and consumers, some may be infinitely more useful (and perhaps less dystopian) than others. Today, a startup that's built a successful business around that concept is announcing a major growth round to expand its business. Manychat, which provides brands with a tool for managing and automating conversations and engagement across multiple messaging channels, has picked up $140 million led by Summit Partners. The funding is coming on the heels of strong growth for the startup. Manychat today has around 1.5 million customers across 170 countries, with the client list including the likes of Nike, the New York Times and Yahoo (the current owner of TechCrunch) as well as individual creators and much smaller outfits. CEO and co-founder Mike Yan said Manychat sends "billions" of messages annually on behalf of these users across TikTok, Instagram, WhatsApp, Messenger and other chat platforms. The plan will be to use this latest Series B round of funding both to invest in R&D -- in particular bringing more AI into the platform -- as well as to boost the company's sales, marketing and support globally. Notably for a startup these days, Manychat is mostly profitable -- mostly, because as Yan describes it, "We always operate on the edge of being kind of break even." Since launching a decade back in 2015, it has only raised around $23 million, mostly from this $18 million Series A round in 2019 led by Bessemer with participation from Flint Capital. (Manychat did not disclose what other investors are in this latest round beyond Summit.) The company is not giving out a valuation but it's likely to be considerably higher than the modest $58 million post-money valuation PitchBook detailed for the Series A. From Telegram to Instagram Manychat's trajectory mirrors both the rise of smartphone-based messaging apps over the last decade, as well as the growing opportunity around tooling for helping businesses to leverage that medium in a better way. In 2015, the email inbox was starting to tip into becoming a spam-laden, tired, and over-used medium for businesses looking to use it for marketing. Yan was coming off the back of a failed social app, and he himself was a Telegram user, one of a growing population of consumers using messaging apps for basic communications. When Telegram opened up its APIs, the lightbulb of inspiration went off for him and his co-founder Anton Morin. "Telegram was actually one of the first western messaging apps to open up its APIs," he recalled. "As users of Telegram ourselves, and we saw a clear job to be done." Companies were using email to connect to users, he said, but that was not where users were spending time. "They should be using messaging apps actually to connect with customers, that's where the new wave of communication is happening. That's where the new consumer is." So he and Gorin built the first iteration of Manychat as a tool for creating chats for businesses on Telegram. It picked up enough traction to get them into the 500 Startups accelerator. Then, when Facebook opened up its APIs for Messenger -- making its own first-efforts to build AI chatbots -- things really started to take off. By the time Manychat raised its Series A in 2019, it was already reaching 350 million users on the platform monthly with billions of messages and an enviable open rate of 80%. Additional APIs opening up across other Meta-owned platforms as well as TikTok have boosted that growth. Users can still market on Telegram, too, Yan said, although these days that is just a small percentage of its traffic. For the record, Instagram is far and away the most engaged and active platform for the company today, Yan said. Manychat's founding and a large chunk of its growth preceded the rise of generative AI and the emergency of AI chatbots like Anthropic's Claude, OpenAI's ChatGPT, and Google's Gemini, among others. In fact, the earlier descriptions of the product touted how it provided a "smart blend of automation and personal outreach" to customers, who were using its no-code platform to build chatbots to grow social followers, collect email addresses, respond to comments and set up flows via DM links to request products or more information on something. Anchoring its product around encouraging further actions, Yan said, is what sets it apart from most chatbots on the market right now, including most GenAI chatbots. Sophia Popova, the Summit partner who led the investment and is joining the board of the startup, believes that Manychat's approach of building out an engagement layer that's seen a lot of success so far makes it a solid bet for the next wave of activity on messaging platforms. "Our thesis hinges on a greater proportion of commerce dollars going through social messaging apps," she said in an interview. "You need to be always on and engaging 24/7. That is what customers expect and Manychat is hitting the nail on the head." In contrast, she said, when considering the DNA of the AI chatbots -- at least what is in the market today -- "very few of them are geared towards personalizing conversation in a way that drives conversion to revenue." If you want a help desk chatbot, there are "myriad" tools out there, but actually very few that are engaging to sell or elicit other responses from users in the way that Manychat has done, she added. Yet given the pace of development -- and the drive that many of the AI startups have to generate revenue to offset their huge cash burn -- this is a gap that may not be there for long, one reason why Manychat is working to build in more AI features to improve its offering.

Manychat Raises Massive $140M Round To Push Chat Automation

Investors are in love with agentic AI and chatbots right now. The most recent example of that infatuation is Manychat's $140 million growth capital raise led by Summit Partners. The Palo Alto, California-based company provides conversational AI and automation tools for businesses across social and messaging platforms. "Manychat was founded with a mission to help businesses grow by building meaningful customer relationships," said co-founder and CEO Mike Yan in a release. "We also take pride in our ability to package and simplify new foundational technologies for the benefit of our customers. ... This new funding, along with Summit Partners' guidance and expertise, will support our continued innovation in the realm of agentic AI and intelligent automation, helping our team and our products deliver true value for businesses and creators around the world." The startup says it sends "billions of messages annually" on Instagram, TikTok and other platforms, for more than a million businesses. The company, which has been profitable, will use the new cash to accelerate its global expansion, invest in R&D, enhance marketing and customer support, and advance AI agent features across new and existing channels. It is no surprise to see companies using AI are getting funded. Last quarter, AI was the leading sector for venture funding with $59.6 billion invested, per Crunchbase.

Manychat gets $140 million to expand social chat with AI agents - SiliconANGLE

Conversational artificial intelligence startup Manychat Inc. said today it has closed on a $140 million growth capital fundraise as it looks to automate more social media interactions for brands, creators, e-commerce businesses and marketing agencies. Today's round was led by Summit Partners and saw the participation of other unnamed investors, bringing Manychat's total amount raised to more than $163.3 million to date. Founded way back in 2015, Manychat is something of a veteran in the conversational AI industry, which probably explains why its social chat application is already being used by more than 1 million businesses and social media influencers across more than 170 countries. The startup has created a chat-based marketing platform that aims to automate creator and brand interactions to help them foster stronger and more impactful relationships with their audiences. Its platform uses advanced generative AI chat models to engage with followers across leading social media platforms, including Instagram, WhatsApp, TikTok and Messenger. On Instagram and TikTok, it can respond to every single question, comment and story reply instantly, helping to nurture every interaction, attract more leads and drive higher conversions. WhatsApp and Messenger meanwhile, can be transformed into an official customer support channel, helping users to find answers to their questions, retrieve order information and discover new products. Larger brands can link Manychat's platform directly to their customer support systems, so customers can be handed off to human agents when they're required to answer more specific questions or deal with complex issues and queries. In addition, it provides tools for analyzing, measuring and optimizing sales metrics across social chat channels. Brands can customize the "voice" of their automated communications to ensure it matches their style. Manychat says social messaging automation is becoming increasingly "vital" because social media platforms have emerged as a major arena for global commerce, set to drive more than $100 billion in sales in the U.S. alone by 2026. Liz Miller of Constellation Research Inc. agreed that conversational AI in social media is one of the most promising applications of generative AI technology, but she warned that brands must take care in how they implement it. If brands are too pushy in their social chat outreach, most people will be put off very quickly. "There's a fine line in social with regard to how these conversations and journeys are architected and orchestrated," she said. "Companies must ensure that the conversation isn't always about customer conversions and commerce-driven, because this is where human consumers will rebel against the machines." The startup's co-founder and Chief Executive Mike Yan said its goal is to help brands and creators leverage generative AI to try and evolve every social media interaction into a meaningful customer relationship. "We take pride in our ability to package and simplify foundational technologies for the benefit of our customers," Yan said. "The more useful and effective our technology becomes, the more our customers can focus on delivering exceptional value in their space." To do this properly, Manychat believes it must do more than just interact with consumers, and start taking actions on behalf of companies using AI agents. That's the main reason why the company was so keen to attract new funding, and it said a significant portion of the money raised will be used to fuel the development of these agents, though it was guarded about their exact nature. Miller said she believes Manychat's focus on AI agents is promising, as it represents the next big step for social chat applications, but it remains to be seen if the company can pull it off. "It needs to have the capacity to reason as well as the capacity to act," she stressed. "These are the requirements of agentic automation, and we're yet to see anyone truly deliver on that."