Malaysia’s AI agent-powered messaging app Respond.io raises $62.5M, eyes acquisitions

Founded in 2017, Respond.io emerged to address a pressing challenge: businesses were struggling to keep pace with customers migrating to messaging platforms. Today, this Malaysian startup has established itself as a significant player in the technology sector, thanks to its innovative customer conversation management software. Headquartered in Kuala Lumpur, Respond.io recently completed a $62.5 million Series B funding round, led by Camber Partners, with contributions from Endeavor Catalyst and existing investors. This follows a $7 million Series A funding round secured in 2022. The company has achieved an impressive $35 million in annual recurring revenue (ARR), reflecting a remarkable 169% year-over-year growth and maintaining a profit margin of 30%, according to statements made to TechCrunch. Co-founder and CEO Gerardo Salandra, who previously worked at IBM and Google, launched Respond in Hong Kong with partners Hassan Ahmed (CTO) and Yaroslav Kudritskiy (COO). Two years later, the team relocated the business to Malaysia. Their platform assists medium to large B2C businesses in capitalizing on customer interactions across various messaging channels, including WhatsApp, Instagram, TikTok, and more. It also incorporates AI agents to efficiently manage high volumes of inquiries, qualify leads, and finalize sales autonomously. Salandra describes their primary clients as “high-consideration” businesses that require customer interaction before purchases, such as in healthcare, automotive, retail, education, and travel. He emphasized that transactions like purchasing a car typically involve extensive customer inquiries through communication, rather than a straightforward online purchase. In a rapidly evolving landscape dominated by AI, a crucial question arises: Can AI tools like ChatGPT overshadow their offerings? Salandra remains confident in Respond.io's strong market presence, reporting that the company processes an astounding 2 billion messages each quarter. He noted, “With the increasing prominence of AI, we are growing faster than ever.” Pricing strategies also set Respond.io apart. Unlike traditional enterprise software that charges per user, Respond.io's model is based on the volume of customer interactions. This means that whether a human or an AI responds, the cost remains consistent, allowing for greater flexibility in customer engagement. Salandra points out that many existing platforms in North America and Europe were originally designed around email and phone communications, treating messaging as an afterthought. This results in a unique opportunity for Respond.io, as a larger volume of data enhances their AI capabilities, creating a beneficial cycle that attracts more customers and generates additional messages. With the new funding, the company is poised to focus on hiring, organic growth, and strategic acquisitions. Salandra is particularly interested in acquiring technologies that can integrate with their existing systems and teams that have established customer bases in key markets like Europe and North America. Currently, Respond.io generates about 30% of its revenue from the APAC region, another 30% from Latin America, and 20% from the Middle East and Africa, with North America and Western Europe contributing 20%. However, Salandra notes that these regions are now its fastest-growing markets, with expectations for them to become the largest revenue segments within the next two to three years. Despite the recent influx of capital, Salandra is committed to disciplined growth, stating, “We don’t want to be a growth-at-all-costs company.” His ambition for Respond.io is clear, with aspirations for a potential listing on Nasdaq in the future.