In 2017, Respond.io set out to solve a simple problem: businesses couldn’t keep up with customers who had migrated to messaging apps. Now, Respond, with its customer conversation management software, has become one of Malaysia’s technological success stories.
The Kuala Lumpur-headquartered startup has raised $62.5 million in a Series B round led by Camber Partners with participation from Endeavor Catalyst and existing investors. The last time it raised $7 million in Series A was in 2022. The company told TechCrunch that annual recurring revenue (ARR) grew to $35 million, a 169% year-over-year growth, and a 30% profit margin.
Co-founder and CEO Gerard Salandra worked at IBM and Google before joining fitness tracking app Runtastic, which was sold to Adidas in 2015, and founded Respond in Hong Kong in 2017 with Hassan Ahmed (CTO) and Laroslav Kudrycki (COO). The team moved its operations to Malaysia two years later.
The platform helps medium to large B2C businesses drive revenue from customer conversations across multiple messaging channels, including WhatsApp, Instagram, TikTok, Messenger, Line, Telegram, WeChat, voice calls, and web chat. It also uses AI agents to automatically process high volumes of customer inquiries, identify leads, and close sales without human intervention.
Salandra described his company’s core customers as “highly considered” businesses such as healthcare, automotive, retail, education and travel where customers need to talk to someone before making a purchase. “Instead of going to a website, entering your credit card, and buying a car, you chat with someone and ask a bunch of questions,” he said. The sweet spot is companies with 200 to 10,000 employees.
The rise of AI raises obvious questions about platforms like Respond. Can a tool like ChatGPT simply replace what you’ve built?
Salandra believes her foothold is strong enough to thwart such an incursion if it happens. The company currently processes 2 billion messages per quarter.
“If you just look at the numbers, AI is becoming more prominent every day and we’re growing faster,” he told TechCrunch. “We don’t understand what the general SaaS market is looking at.”
Part of that is due to pricing, he said. Unlike competing enterprise software that charges per seat, Respond charges based on the volume of customer conversations, regardless of whether a human or AI responds. “If fewer people use the product, there will be less income,” he said. “But we don’t make those charges.”
Existing platforms, especially those dominant in North America and Europe, were built around email and phone calls. “Existing platforms added messaging as an afterthought. They’re very email-focused, they’re very call-focused, but they’re an afterthought when it comes to messaging,” Salandra says.
According to the CEO, that large amount of message data creates a feedback loop. The more messages, the better the AI. As AI improves, you will attract more customers. More customers generate more messages. “This is what we call the data flywheel,” Salandra said. He added that a head start is important for any emerging AI company. “We started a very long time ago and have a very strong foundation, so we can offer better AI compared to companies that are just entering the messaging space.”
With the new capital, Salandra said the company plans to pursue hiring, organic growth and acquisitions. CEOs have two types of purchasing targets in mind. One is a bolt-on technology that fits into the existing ecosystem, and the other is an established team with a strong customer base in strategic markets such as Europe and North America. “Imagine how many months you could save if you found the right company, which probably already has clients and a team,” he said. “An acquisition could save us six months to a year,” he said, acknowledging that the company is already in talks with several potential targets.
A geographic push makes strategic sense. Respond currently generates approximately 30% of its revenue from Asia Pacific, 30% from Latin America, 20% from the Middle East and Africa, and just 20% from North America and Western Europe. But Salandra says these areas are currently the fastest growing. “It took a while to change, but now we’re moving very quickly to messaging channels,” he said, adding that he expects both regions to become the company’s largest segments within two to three years.
Despite the new capital injection, Salandra is cautious about what happens next. “We don’t want to be a growth-at-all-costs company,” he said. “Even with this funding, we’re going to be very disciplined.” But Salandra has bigger plans in mind. “My favorite result?” he said. “Ring the NASDAQ bell.”
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