Deal To Watch: The AI Customer Service Agent


To date and as of 1/5/2019, has raised $30K

Kylie.AI has been picked as a Deal To Watch, which is reserved to the top 10-20% of our due diligence funnel. If you have more questions about the selection process let us know at


As of 2018, the e-commerce subscription market according to McKinsey is a $10Bn industry, and as large as $20Bn if you include Amazon Prime. Companies like Stitch Fix, HelloFresh, Dollar Shave Club and the like have become billion dollar business by enabling Americans to automate nearly every facet of their lives from fashion to hygiene.


This booming subscription market is growing as consumers demand services that provide lower overall cost (Dollar Shave Club) and/or more personalization (Stitch Fix). As this new line of companies has emerged over the past few years, we’ve also seen more traditional retailers dying. But that doesn’t mean consumers no longer care about customer service. In fact subscription service consumers expect strong customer service and balk at services that fall short on this dimension.


In this Forbes article, the customer service market size is pegged at $350 Bn. The author rightfully calls out the fact that the industry is a mess and in need of new service solutions. Let’s be clear; one of the reasons VCs have funded all of these amazing subscription services is because of their belief that they are scalable businesses that can create personalization and cost savings for customers through automation.


However, if customer service is a key component of these businesses, the opportunity for scale can be greatly hampered by the need to hire lots of customer service agents. Each convenience that consumers gain translates into an additional cost for businesses that need to manage a greater influx of calls, chats and email messages from customers.


Perhaps, an AI driven tool can help cut down on the $41B lost by businesses on a yearly basis because of poor customer service is needed. IBM estimates by 2020, 85% of all customer interactions will be handled without a human.


This is where Kylie.AI comes into play with an AI driven solution that can help protect the scalability and cost efficiencies of the fast growing e-commerce and subscription market while helping to cut down on the poor performance of today’s customer service team s.

Solution claims that they can reduce the cost of customer service calls from $20 to $1.50 with its AI driven solution. While this is likely an aggressive cost reduction estimate, we sourced several call centers and checked out various reports and we typically saw estimates of call centers costing between $30 to $60 per hour.


Put simply, it is costly to manage many customer service agents and automation could help greatly reduce these cost while controlling more of the customer service experience in-house.


This is why the need for artificial intelligence (AI) driven customer service solutions that can minimize the number of humans needed to handle low hanging fruit customer service needs (e.g., payment issues, passwords lost) is needed. Simple questions like “how do I reset my password” can be easily answered by an AI by compiling previous answers to similar questions, and selecting whichever response was most commonly used.


If most customer needs can be met with an AI driven solution that means less employees are needed and those that are hired can spend more time working on complex cases with a high touch approach. Kylie’s algorithm can even help with complex cases by considering a company’s brand identity, business strategy/plan, and customer services’ prior responses to generate customized responses.


Better yet, Kylie.AI is built for the modern workplace working with the full suite of typical office tools (e.g., Salesforce, Slack, Gmail) and is meant to be seamless in order to enhance not detract from the customer representative’s toolset. Ultimately, this solution leads to a better and more consistent customer experience while also minimizing cost incurred by the business to do so.

The Competitors  

This is a space with several solutions at various points of development. We are providing a few below that have made inroads. However, to be very clear this is still a fragmented space that has seen large organizations like Verizon and IBM make attempts while smaller startups as you see below have as well.  

Digital Genius:

Raised $26M out of UK

A similar solution to in that it automates the most common customer service tasks but it is UK based.  


Raised $38.5M

A bit more focused on automated workflows and bots rather than enhancing the ability for CX agents to respond best. Nonetheless, a close competitor.

Sweden based, this is mostly for chat automation only, and is focused more heavily on prospecting new customers.

 While we think this is a space with a lot of players and noise, we also think that no clear leader has won the market yet and there is still significant opportunity to become a dominant player in the space as it begins to mature and be more widely adopted over the next 3 to 5 years.


Jamasen Rodriguez (CEO), found previous entrepreneurial success, launching a non-profit supporting at-risk youth to come to college with athletic scholarships and raising over $5MM as early on as high school. Jamasen also started a wholesale chocolate retailer while studying economics at Johns Hopkins.


Sinan Ozdemir (CTO), simultaneously finished his Bachelors and Master’s degrees at Johns Hopkins University in theoretical mathematics in the applications of Algebra and Cryptography. He designed and taught data science and computer science as one of Johns Hopkins’ youngest lecturers ever, at the age of 21 and has conducted training sessions for machine/deep learning at a variety of companies.


Deal To Watch


At an $11M valuation cap in a massive market ($300Bn+), which is ripe for adoption of new AI driven solutions and one large contract already in place showing an early ability to close deals, we think this team will benefit from movement towards AI driven customer service teams.


The reason we have provided a Deal To Watch rating, rather than a Top Deal is out of concern that teams like IBM Watson and other well funded companies are out ahead a bit and the market still feels a bit nascent. While there is a lot of talk about AI adoption in customer service, it still has not necessarily become universally accepted.


Regardless, there will be nice exit opportunities from the current valuation and we like this teams ability to continue to execute and grow in this new market.

About: Chris Lustrino

A Boston College Eagle for life, on a mission to democratize startup investing for all people at KingsCrowd, with a passion for Fintech, investing, social impact, doing well and doing good, and an avid runner, cyclist and writer.

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