According to Reuters, Sierra, a software startup founded by Bret Taylor, former co-founder and co-CEO of Salesforce, has successfully raised $175 million in a funding round led by Greenoaks Capital, increasing the company's valuation to $4.5 billion.
The announcement of this funding comes less than a year after Taylor, a prominent Silicon Valley entrepreneur, publicly unveiled the creation of this AI-focused startup.
Sources told Reuters that prior to this round, Sierra had raised $110 million at a valuation close to $1 billion, backed by Sequoia Capital and Benchmark. In this latest financing, Thrive Capital and Iconiq also actively participated.
Despite growing concerns about a bubble in the artificial intelligence sector, Sierra has successfully become one of the highest-valued AI startups following this funding round. Insiders revealed that the company's annualized revenue has surpassed $20 million.
For early-stage startups, high valuations are typically driven by significant growth potential and strong investor confidence in the sector and the founding team. Sierra's substantial valuation increase indicates a keen investor interest in AI companies, with investors willing to pay premium multiples. "The Information" has previously reported on these funding negotiations.
Founded a year ago, Sierra specializes in providing AI-driven customer service chatbot solutions to businesses. Its clientele includes well-known companies such as WeightWatchers and Sirius XM.
Since OpenAI's ChatGPT gained public attention, investor interest has shifted from costly foundational models to enterprise-level applications capable of generating steady revenue. Sierra AI, co-founded by Taylor and Google veteran executive Clay Bavor, has entered a highly competitive field of AI customer service solutions, teaming up with industry giants like Salesforce and emerging companies such as Forethought.
Sierra claims that by mitigating the common issue of "hallucinations" in large language models, the company can enhance brand trust in interactions between AI agents and customers.
Sierra is Taylor's latest entrepreneurial venture, following his rise in Silicon Valley through his leadership role at Salesforce. Taylor also serves as the chairman of OpenAI's board and has quietly managed the competitive relationship between OpenAI, dedicated to developing AI technologies, and Sierra.
Taylor previously led Twitter's board and was considered a potential successor to Salesforce CEO Marc Benioff before Elon Musk's high-profile takeover of Twitter. His co-founder, Clay Bavor, joined Google in 2005 and held management roles in key projects such as Gmail and Google Drive.
