Jesse Zhang's Decagon AI Closes $100 Mil C Round for $1.5 Bil Valuation
By H Y Nahm | 12 May, 2025

A promising startup in customer service AI agents has raised a total of $200 million in 2 years as it takes on bigger established competitors.

The real AI gold rush at the moment is in bots that can handle a company's customer service needs at a fraction of the cost of human staff.  Decagon has shown it can compete by providing agents that can cut costs by upwards of 95%, surpassing CEO Jesse Zhang's goal of building AI agents 10 times as cost-efficient as employees.

Before co-founding Decagon with CTO Ashwan Sreenivas, CEO Zhang sold his first venture, Lowkey, an online platform used by gamers to share clips of their most virtuoso virtual exploits.  The six years he spent struggling to build that consumer business taught Zhang the importance of improving user experience by paying attention to user input.  

That education in handling customers proved invaluable in building Decagon AI which is, after all, a business focused on providing client businesses AI agents that can handle everything from technical support to order processing and cancellations at high speeds while achieving a high resolution rate.

Decagon has achieved this by grilling its early clients about their customer service needs and the amount they were willing to pay to have those services automated.  By using  established large-language models (LLM) from AI leaders OpenAI, Anthropic and Cohere as the foundation on which to build customized modules developed in house, Decagon has been able to deliver AI agents that meet client needs more efficiently than competitors.

Thanks to that effort, pursued with an intensity Zhao deems critical to a startup's success, in well under two years since launch Decagon has sold its customer support chatbots to major clients like Notion, ClassPass, Duolingo, Substack and Bilt, with $10 million in recurring annual revenues or signed contracts.  In doing so Zhao and Sreenivas have put Decagon in head-to-head contests with Sierra, the established giant with a $4.5 bil. valuation, as well as Salesforce.  

Thanks to Zhao's ability to articulate the philosophy and method behind Decagon, it has had little trouble raising funding, starting with $5 mil. in seed, followed by $30 mil. series A and $65 mil. series B, before getting Andreessen Horowitz and Accel to anchor the current $100 mil. series C round.

Jesse Zhang was born in Boulder, Colorado.  His childhood was spent focused on hardcore nerd activities like math decathlons.  Zhang majored in computer science at Harvard, graduating a year early on an accelerated program, before founding Lowkey and eventually selling it to Niantic.  Sreenivas too had started and sold his first venture before joining Zhang to co-found Decagon AI.