The use of voice AI in sales, marketing, customer support, and consumer applications has exploded in recent years. As a result, model providers have seen an increase in business, as well as investor interest. Building on this demand, today, Deepgram said it raised $130 million in a Series C round led by AVP at a valuation of $1.3 billion.
The round also saw existing investors such as Alkeon, In-Q-Tel, Madrona, Tiger, Wing and Y Combinator investing more money. Additionally, new investors like Alumni Ventures, Columbia University, Princeville Capital, Twilio and SAP joined the round. The company has raised more than $215 million in funding to date.
The startup’s raise continues the trend of large fundraising in voice AI last year, including Sesame’s $250 million Series B, ElevenLab’s $180M Series CAnd Gradium’s $70 million funding round.
Elizabeth de Saint-Aignan, a partner at AVP, told TechCrunch that when the fund talked to companies about how they were using AI, the voice came up frequently and he began to look at companies working in this area.
“In 2024, when we were talking to companies about how they planned to use AI within their business, we started hearing about them using voice AI in processes like contact centers and sales development. When we talked more with them, we realized that a lot of the voice AI technology was powered by Deepgram, and that’s what led us to them (Deepgram),” said de Saint-Aignan.
She noted that voice AI could help make customer interactions with businesses more enjoyable while reducing costs for businesses, and Deepgram could play a central role in this.
Deepgram offers many templates related to speech synthesis and speech-to-text, as well as platforms and APIs for conversational speech recognition and interrupt handling with low latency. It noted that more than 1,300 organizations use its voice AI products and models, including note-taker Granola, voice agent startup Vapi and Twilio.
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The company’s CEO, Scott Stephenson, said the company did not need the fundraising and was cash flow positive last year.
“Over the last year, voice AI has become more widespread and its traction potential is greater. We see that we can make larger investments earlier in order to accelerate growth. And that’s why we thought this might be a good time to raise,” he said.
“However, we were not looking for a raise. Several people came to us. We were looking for strategic investors who understand voice AI and its technical intricacies and who have relationships with companies that use this technology.”
The company wants to use the new fundraising to expand its global presence and better support multiple languages. It also focuses on restaurant catering using voice AI. To that end, it acquired Y Combinator-backed OfOne, which built an AI-powered voice solution for quick-service restaurants. The startup claims to have over 93% accuracy in receiving orders. Voice AI has had its challenges in the restaurant business. Last year, Taco Bell withdrew its voice AI experiment after one person ordered 18,000 cups of water.
“I’m excited about this voice AI-based food ordering because ordering food could be the first positive interaction that more than 300 million Americans have with voice AI. There have been a lot of unpleasant interactions with voice AI over the past 20 years, where many assistants have appeared, and people felt they didn’t offer a magical experience. But when you can order your food using natural conversation, people would think the technology is ready,” Stephenson said.
There appears to be investor interest in the sector, as news of OfOne’s acquisition comes after Presto, which serves brands like Carl’s Jr., took over $10 million in new funding.
Analysts reports The voice market is expected to grow more than 30% year-over-year and become a $14-20 billion market by 2030. With this growth rate, template and API providers will seek to become multi-billion dollar companies by becoming a critical component for enterprises and startups developing voice solutions.