Crescendo AI: The $500M startup reinventing customer service with AI 🚀

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Hi 👋, this is the Today in AI Newsletter: The weekly newsletter bringing you one step closer to building your own startup.

We analyze a cool, industry-shaping AI startup every week, with a full breakdown of what they do, how they make money, how much they’ve raised, and the opportunity ahead. 

Let’s get to the good stuff in this email: 

• 💨This startup helps businesses fully automate their customer service

• 🚀 They’ve already hit $91M ARR, only 15 months from launch

• 💰 They’ve raised a $50M Series C at a $500M valuation led by General Catalyst

So what’s the startup and who are the founders behind it? Here’s the story of Crescendo AI 📈

Crescendo AI was founded by Andy Lee, Anand Chandrasekaran, Matt Price and Dr. Slava Zhakov in 2023 with the mission to rebuild customer service with generative AI.

There’s a long-standing issue in the contact center industry where “the unit of value is labor”.

This model often leads to inconsistent quality and a lack of alignment between businesses and their customers’ desired outcomes.

Crescendo provides businesses with outsourced management of their customer service and contact center operations using AI. 🤖

They use existing LLMs like ChatGPT and Claude to power their tools, building innovation layers optimizing for customer service on top. 🚀

The Opportunity 🤑

The contact center industry is massive:

• 📞 Valued at $460B in 2022, expected to hit $741B by 2030

• 📞 Contact centers account for 34% of the service market and 15% of all white-collar jobs in the U.S.

• 📞 Philippines and India dominate with 12% and 15% market share respectively

Yet, despite this scale, innovation has been lacking:

• ⚡ Only 12-15% of contact centers have moved to the cloud, compared to 55-60% in CRM

• ⚡ Contact centers are still treated as cost centers

• ⚡ Agent turnover rates are brutal (30-35%), driven by high rates of burnout

AI could slash up to $80B in labor costs by 2026 (Gartner) and turbocharge human agents — reducing burnout, increasing efficiency, and making customer service jobs actually satisfying.

But many contact centers haven't even migrated to the cloud yet — making AI adoption an afterthought for most.

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Backstory 👀

Anand grew up in India, where he went to school and did his bachelors in Electronics and Communication. 🎓

He then got into Stanford for electrical engineering with a focus on mobile software and networking with the rise of social networks and the internet. 🌐

Anand started a mobility solution startup out of Stanford which, 8 years in, got acquired by BMC Software (NASDAQ: BMC) for $21M. 💰

He then went on to head product at Yahoo, SnapDeal and even Facebook’s Messenger Platform. 📱

He then started angel investing getting early into Deel, Carta and Invideo. This made him one of India’s top seed investors over the past 3 years. 🌱

He also joined General Catalyst as a General Partner following his track record in venture and the startup world. 🧠

This is when he met Andy Lee, founder of $2B BPO giant Alorica through a connection from one of the founders of observe.ai.

They had a shared frustration: Contact centers were broken. 💥

Despite billions spent on software, outcomes barely improved. Labor, not performance, remained “the unit of value”.

Integrations were messy, incentives were misaligned, and customer satisfaction was declining. 📉

Crescendo was then incubated by General Catalyst where Anand was a partner. 🌟

They quickly assembled the dream team. Alongside Andy and Anand, there was:
 1. 👨‍💼 Matt Price: Scaled Zendesk from early-stage to IPO.
 2. 👨‍💻 Dr. Slava Zhakov: Early Genesys CTO, and architectured massive CCaaS wins.

Together, the 4 co-founders have helped create 4 $1B+ ARR companies. Now they’re building the fifth… 🏗️

The Hustle 🤑

In the earliest stages, Crescendo’s intent was to make buying CX AI services extremely easy by offering a product-service offering that delivered an outcome to businesses. 🛒

Traditional BPOs charged based on headcount, Crescendo started charging by outcomes. 🎯

This way their incentives were then a lot more closely aligned with the goals of achieving better customer service. 💬

Instead of replacing manual processes with AI, Crescendo started vertically integrating:

• 🤝 Partnering with elite operators like Alorica and Zendesk

• 🤝 Teaming up with top AI engineers and CCaaS pioneers

• 🤝 Building an AI-native contact center platform - from software to service delivery

They initially only deployed in 1-2 core verticals to prove their service does 10x productivity gains.

As soon as that was proven, it was a lot easier to get clients. 🧩

If Crescendo succeeds, it won’t just make call centers more efficient.

It will transform how 15% of U.S. white-collar work happens — and unlock the biggest leap in customer experience the industry has seen in over two decades. 🚀

Stats 📊

💸 Fast forward to today, Crescendo has hit $91M in ARR profitably, only 15 months from launch and are on track to hitting $100M ARR next month.

🌎 They offer their service in over 50 languages and claim to reduce CX support costs by 20% at launch at a 99.8% accuracy to customer queries. 

🛡️ Crescendo instantly resolves 75% of interactions and has had zero customer downtime in production deployments since launch. 

🤝 More recently, Crescendo acquired PartnerHero, a leader in CX innovation. 

🗺️ Through PartnerHero, Crescendo scaled operations to six continents, acquired 200 customers worldwide, and added 3,000 human-in-the-the-loop CX professionals. 

💰Crescendo raised a $50M Series C at a $500M post-money valuation in October 2024 led by General Catalyst with participation from Celesta Capital and Alorica. 

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