Respond.io raises $62.5M to buy rivals in the West

Key Takeaways

• Respond.io raised $62.5M Series B led by Camber Partners, growing 169% YoY to $35M ARR with a 30% profit margin
• The company plans acquisitions in North America and Europe, where it sees fastest growth despite currently earning only 20% of revenue
• CEO Salandra argues conversation-based pricing insulates the company from AI disruption that threatens per-seat SaaS competitors

Respond.io, the Kuala Lumpur-based messaging platform, has closed a $62.5 million Series B round led by Camber Partners. The company will use the capital primarily to acquire competitors in North America and Europe, regions where it currently generates just 20% of revenue but sees its fastest growth.

The round comes with numbers that stand out in the current SaaS funding environment: $35 million in annual recurring revenue, 169% year-over-year growth, and a 30% profit margin. Endeavor Catalyst and existing investors also participated. Respond.io last raised $7 million in a 2022 Series A.

What does Respond.io actually do?

The platform helps mid-sized and large B2C companies manage customer conversations across WhatsApp, Instagram, TikTok, Messenger, Telegram, WeChat, Line, and web chat. AI agents handle routine inquiries, qualify leads, and close sales without human intervention.

CEO Gerardo Salandra describes the core customer base as "high-consideration" businesses. Healthcare, automotive, retail, education, travel. Industries where people need to talk before buying.

“You don't go to a website, put your credit card, and buy a car; you chat with someone, you ask a lot of questions.”

— Gerardo Salandra, CEO of Respond.io

The sweet spot is companies with 200 to 10,000 employees. The platform processes 2 billion messages per quarter.

Why acquisitions, and why now?

Salandra has two types of targets in mind. First, bolt-on technology that fits into the existing product. Second, established teams with strong customer bases in strategic Western markets.

"Imagine how many months I can save if I find the right company that maybe already has the clients and the team," he told TechCrunch. "I can save myself six months to a year through an acquisition." He confirmed the company is already in talks with potential targets.

The geographic logic is straightforward. Respond.io currently earns 30% of revenue from APAC, 30% from Latin America, and 20% from the Middle East and Africa. North America and Western Europe together account for just 20%, but Salandra says these regions are now the company's fastest-growing segments.

"They took longer to make the change, but now they're moving very rapidly into messaging channels," he said. He expects both regions to become the company's largest within two to three years.

Can ChatGPT replace this?

The obvious question for any platform handling customer messages: what happens when AI tools get good enough that businesses plug in ChatGPT directly? Salandra's answer hinges on pricing structure and data advantage.

Unlike enterprise software competitors that charge per seat, Respond.io charges based on conversation volume. Whether a human or an AI handles the message, the customer pays the same. Per-seat competitors lose revenue when AI replaces human agents. Respond.io doesn't.

"When fewer humans use your product, they make less money," Salandra said. "But we don't charge like that."

He also points to the data flywheel. More messages mean better AI training data. Better AI attracts more customers. More customers generate more messages. The 2 billion messages per quarter create a compounding advantage that new entrants can't replicate overnight.

"Because we started so long ago and we have such a strong foundation, we can provide better AI compared to someone who just entered into the messaging space," Salandra said.

The case against legacy platforms

Salandra sees an opening against incumbents in North America and Europe. Those platforms were built around email and phone calls. Messaging came later, bolted on as an afterthought.

"The platforms that exist, they bolted on messaging as a second thought. They're very email focused, they're very call focused, but when it comes to messaging, it's an afterthought," he said.

Respond.io, founded in Hong Kong in 2017 before relocating to Malaysia in 2019, was built messaging-first. Salandra previously worked at IBM and Google before joining Runtastic, the fitness app Adidas acquired in 2015. Co-founders Hassan Ahmed serves as CTO and Iaroslav Kudritskiy as COO.

IPO ambitions, but discipline first

Despite the fresh capital, Salandra says the company will stay conservative. "We don't want to be a growth at all costs company. Even with this money, we're going to be very disciplined."

The long-term goal is clear enough. Asked about his favorite outcome, Salandra said: "Ringing the bell at Nasdaq."

Whether that happens depends on execution in markets where Respond.io remains a relative unknown. The acquisitions Salandra is pursuing could accelerate that timeline, or create integration headaches. The 30% profit margin gives the company room to absorb some mistakes.

Frequently Asked Questions

How much did Respond.io raise in its Series B?

Respond.io raised $62.5 million in its Series B round, led by Camber Partners with participation from Endeavor Catalyst and existing investors.

What is Respond.io's annual recurring revenue?

The company reports $35 million in ARR, growing 169% year-over-year while maintaining a 30% profit margin.

How does Respond.io's pricing differ from competitors?

Unlike per-seat enterprise software, Respond.io charges based on conversation volume. This means revenue stays stable whether humans or AI agents handle customer messages.

Which regions is Respond.io targeting for expansion?

The company is focused on North America and Europe, where it currently earns only 20% of revenue but sees its fastest growth. CEO Salandra expects these to become the company's largest segments within two to three years.

What industries use Respond.io?

The platform serves "high-consideration" B2C businesses where customers need to talk before buying, including healthcare, automotive, retail, education, and travel. The sweet spot is companies with 200 to 10,000 employees.

Source: Startups | TechCrunch / Kate Park