Salesforce's Strategic Move: Acquiring Airkit.ai for AI-Powered Customer Service Creation

0:00In what I view as a fairly significant move deepening its direction into AI and customer service. Salesforce recently announced, like I mentioned, that they're going to be acquiring this AirKit.ai, which is really a platform specializing in enabling e-commerce businesses to create AI-enhanced customer service agents. And I think the financial details around this whole acquisition, they have not released yet. But for people unfamiliar with AirKit's kind of trajectory, this is a Redwood City, California based company. And it was actually founded back in 2017 by two people, Adam Evans and Stefan Ekian.

0:38So those that are unfamiliar with the names, those are names in kind of the Salesforce ecosystem. They previously actually took, you know, their big data venture, which was called Raltel Q. And that was actually purchased in the past by Salesforce for around$390 million back in 2014. So it's kind of interesting because this is, you know, two guys, they created a software company, sold it to Salesforce for$390 million. Now they've started another software company. And again, they're selling it to Salesforce. So it's kind of funny, right? Salesforce maybe just uses them as like a little startup incubator to feed them great companies.

1:17But yeah, I mean, well played by them. Double startups, double acquisitions, both by Salesforce. So very dynamic duo for sure. In any case, originally AirKit emerged as a self-serve customer engagement solution, which was kind of aiming to bridge the often problematic data silos for businesses and streamlining processes like, you know, user onboarding, among other things. So fast forward to last month and the platform underwent a significant pivot. So rebranding as AirKit.ai, the firm unveiled its pioneering product, which is a platform empowered by GPT-4. And this innovation empowers companies, including names like OpenTable and ShipBob to craft highly specialized customer service chatbots.

2:02So these bots are proficient in handling a whole bunch of tasks from, you know, outdating order statuses and processing refunds to providing detailed product insights. But just to go back a little bit and give you kind of the full picture on this. Back in 2020, so AirKit.ai actually raised$28 million from Accel, who obviously, you know, top US venture capital firm and Salesforce Ventures. And that's kind of when they launched this thing. So, you know, Salesforce, while they're buying them today, they've actually, you know, previously were investing in a round that raised$28 million. And I think the subsequent investment rounds saw the startup receive around a total of 68 million dollars during over the course of its six years.

2:51It really kind of cemented its ties with Salesforce when AirKit got its platform listed on Salesforce's enterprise cloud marketplace. They're kind of like app exchange last year. So I think it's really hard to overlook, you know, really this kind of mounting excitement around generative AI platforms like ChatGPT. I think investors are definitely in a bit of a frenzy to kind of find and fund the next standout venture in this arena. They know that a lot of different areas in the economy are struggling and AI right now is kind of one of the silver linings that seems to just keep growing. So I think given this backdrop, it's not very surprising that a generative AI enterprise with some really deep-rooted connections to Salesforce is going to kind of pique their interest.

3:36And I think that this sentiment is really kind of accented by Salesforce's recent commitment to invest around$500 million in generative AI startups. I'd be really curious what they ended up actually buying AirKit for. It had already received around$68 million in funding. They're planning on investing$500 million. So this is obviously coming out of that. But yeah, I'd just be really curious to hear what the deal terms are. In any case, as really the business community is waiting keenly for the deals kind of culmination to see what's happening, which is anticipated by to really kind of this whole thing supposed to close by January of 2024.

4:17Salesforce has charted out that they're very interested in this. And AirKit.ai is slated to kind of blend into Salesforce's established customer service platform, which is called Service Cloud. so they're kind of getting directly integrated and I think in a nod to its expertise and leadership Evans will retain the reins and continue to lead the business's future endeavors so just because it's getting acquired doesn't mean you know the whole company's getting dissolved or whatnot and just kind of absorbed but you know Evans is going to continue to run it as he's been currently doing I think for Salesforce and the broader AI community this acquisition kind of signals more than a business transaction.

4:58It's kind of, you know, showing the growing importance of integrating cutting edge AI capabilities into reshaping customer service for the digital age. I also think this is a really good lesson for founders and for the enterprise to kind of see some of the ways that partnerships and some of the value that partnerships play, right? Obviously, this is a company that was heavily invested in by Salesforce and then heavily integrated into what Salesforce was doing. And then it kind of got to the point where Salesforce was like, hey, well, you know we love what you're doing we're already integrated we've been with you for a number of years i mean they'd even bought a previous company from the founders and so at that point they just decided to do a straight up acquisition and kind of bring them under salesforce's umbrella so really interesting lesson here and i'm going to be curious to see if we see a lot more of that as a lot of ai companies right now are building partnerships and getting investment from a lot of big software companies it'll be interesting to see how that continues to play out in the future