Introduction Of Capacity
Capacity, the support automation firm co-founded by David Karandish in 2017, has marked a significant milestone with a $26 million Series D funding round. Originally aiming for a $5 million “bridge round,” the company received an additional $21 million from investors, including TVC Capital and Toloka.vc. This surge in funding comes at a pivotal moment as It expands its AI-driven platform and continues to acquire companies that strengthen its position in the market.
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Key Acquisitions Strengthening Capacity’s Platform
Amid the funding developments, Capacity has completed three strategic acquisitions: Lucy, an enterprise search firm, and two customer service automation startups, Linc and Envision. These acquisitions are aimed at enhancing It ability to automate customer support while expanding its market reach.
- Lucy: This enterprise search firm specializes in ingesting and analyzing data from various enterprise systems. Karandish sees Lucy’s technology as a powerful complement to It indexing capabilities, improving its ability to pull knowledge from diverse sources and provide users with actionable insights.
- Linc: A startup focusing on self-service tools for retail and e-commerce, Linc’s technology will enable It to extend its automation solutions to this rapidly growing sector, empowering companies to handle more customer inquiries without human intervention.
- Envision: Specializing in flagging unresolved customer interactions, Envision’s tools will help It clients improve their contact center solutions by identifying where human agents should step in, ensuring a smooth transition from AI to human support.
The integration of these companies into It platform will not only expand its capabilities but also enable the firm to deliver more comprehensive automation tools to its growing client base.
A Transformative Moment for AI in Support Automation
It AI-driven platform connects to a company’s existing tech stack—such as Gmail, customer relationship management (CRM) software, and enterprise apps—to answer queries and automate support tasks. By building a knowledge base from these sources, It tools can answer complex queries, automate routine tasks, and even facilitate internal communication.
“Rising costs have placed pressure on support teams to do more with less,” Karandish explained. “At the same time, consumer expectations are shifting rapidly, where they want self-service but are frustrated by subpar experiences. Capacity is designed to provide a great customer experience while allowing escalation to a human when necessary.”
The chatbot and helpdesk capabilities are at the heart of Capacity’s platform, allowing companies to automate both internal and external communications. Employees can ask Capacity’s chatbot complex questions, such as inquiring about contract changes or updating a sales lead. Capacity also enables businesses to embed the chatbot on their websites to answer common customer queries, all while protecting sensitive company data through filters.
Competing in the AI Landscape
Capacity’s growth comes at a time when companies are increasingly turning to AI for support automation, recognizing its ability to reduce operational costs and improve customer experience. As Karandish highlighted, Capacity’s approach is similar to the compound model followed by companies like Parker Conrad’s Rippling, but with a focus on customer support.
Innovations in AI-driven self-service solutions are becoming more attractive to companies, especially as major players like Zendesk and startups like Directly push the envelope. Zendesk’s acquisition of Cleverly.ai in 2022 is a prime example, demonstrating the growing interest in creating AI-powered solutions that can offer reliable, consistent customer support without the need for constant human oversight.
Despite these advances, getting self-service right remains a challenge for many companies. A Gartner study found that only 14% of customer service issues are fully resolved through self-service, illustrating the need for more sophisticated solutions like those offered by Capacity.
Looking Ahead: Expansion and Profitability
Capacity’s recent growth has positioned the Saint Louis-based company to significantly expand its workforce, with plans to grow its headcount to 200 employees by the end of the year. The company’s annual recurring revenue is nearing $50 million, and its customer base now includes over 2,500 brands.
Karandish expressed confidence in Capacity’s future, noting that the company is on track to reach profitability. He emphasized that each of the eight acquisitions made to date—including earlier acquisitions like Textel, LumenVox, and SmartAction—has added critical technology and talent to Capacity’s portfolio, accelerating its mission to become a leader in AI-powered solutions for both customer and employee experience.
“Our customers are asking for an all-in-one AI platform that can deliver across all communication channels,” Karandish said. “We’ve identified 24 steps of the customer experience that are ripe for support automation. Each acquisition adds specific tech and talent to help Capacity meet that demand.”
Conclusion
Capacity’s latest funding round and acquisitions mark a period of transformative growth for the company. By leveraging cutting-edge AI and strategic partnerships, Capacity is positioned to redefine the support automation landscape, offering comprehensive, all-in-one solutions that help brands meet rising customer expectations while driving operational efficiency. As businesses increasingly look for ways to do more with less, Capacity’s platform is set to play a pivotal role in shaping the future of customer and employee support.
