Usage of voice AI in sales, marketing, customer support, and consumer applications has shot up in the last few years. As a result, model providers have seen increased business, along with investor interest. On the back of this demand, today, Deepgram said that it has raised $130 million in a Series C round led by AVP at a $1.3 billion dollar valuation.
The round also saw existing investors such as Alkeon, In-Q-Tel, Madrona, Tiger, Wing, and Y Combinator put in more money. Plus, new investors like Alumni Ventures, Columbia University, Princeville Capital, Twilio, and SAP joined the round. The company has raised over $215 million in funding to date.
The startup’s raise continues the trend of sizable funding rounds in voice AI last year, including Seasame’s $250 million Series B, ElevenLab’s $180 million Series C, and Gradium’s $70 million seed round.
Elizabeth de Saint-Aignan, a partner at AVP, told TechCrunch that when the fund was talking to enterprises about how they were using AI, voice came up frequently, and it started looking into companies working in this area.
“In 2024, when we were talking to enterprises about how they were thinking about using AI inside their business, we started to hear about them using voice AI in processes like contact centers and sales development. When we chatted with them more, we realized a lot of voice AI tech was powered by Deepgram, and that’s what led us to them [Deepgram],” Saint-Aignan said.
She noted that voice AI could help in making customers’ interactions with enterprises more pleasant while reducing costs for companies, and Deepgram could play a central part in it.
Deepgram has a bunch of models related to text-to-speech and speech-to-text, along with platforms and APIs for conversational speech recognition and interruption handling with low latency. It noted that more than 1,300 organizations use its voice AI products and models, including meeting notetaker Granola, voice agent startup Vapi, and Twilio.
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The company’s CEO, Scott Stephenson, said that the company didn’t need the fundraise and it was cashflow positive last year.
“In the last year, voice AI has gone mainstream, and there is more potential pull. We see that we can make larger investment sooner in order to accelerate growth. And that is why we felt it could be a good time to raise,” he said.
“We weren’t out looking for a raise, though. We had multiple people coming to us. We wanted strategic investors who understand voice AI and the technical intricacies of it and have relationships with companies building using the technology.”
The company wants to use the new fundraising to expand its global footprint and better support multiple languages. It is also focusing on catering to restaurants through voice AI. To that end, it has acquired Y-Combinator-backed Ofone, which built a voice AI-powered solution for quick service restaurants. The startup claims that it has more than 93% accuracy in receiving orders. Voice AI has had its challenges in the restaurant space. Last year, Taco Bell withdrew its voice AI experiment after a person ordered 18,000 water cups.
“I am excited about this [voice AI-driven food ordering] because food ordering might be the first positive interaction more than 300 million Americans have with voice AI. There have been a lot of sour interactions with voice AI over the last 20 years, where a lot of assistants have come out, and people felt that those didn’t provide a magical experience. But when you can order your food using natural conversation, people would think the technology is ready,” Stephenson said.
There seems to be investor interest in the sector, as OfOne’s acquisition news comes after Presto, which serves brands like Carl’s Jr., picked up $10 million in new funding.
Analysts’ reports peg the voice market to grow at over 30% year-over-year and become a $14-$20 billion market by 2030. With this growth rate, model and API providers will look to be multibillion-dollar companies by becoming a core component for enterprises and startups developing voice solutions.
