Decagon, Sierra And AI's Amazing Race In Customer Support
Silicon Valley is pitting startups Sierra, valued at $4.5 billion, and Decagon, currently raising $100 million-plus, in a battle to build customer support agents. But the race is still wide open.
Silicon Valley loves a good two-horse race. And given the gravitation pull of AI startups with investors, practitioners and media, it’s no surprise that the category seems even more dominated by these neatly-defined duopolies.
We mentioned a few after spending time in San Francisco earlier this month. Beyond Anthropic vs. OpenAI at the model layer, there’s Cursor (which leans on Anthropic’s models) faced off against Windsurf (which OpenAI is reportedly buying). Bolt and Lovable are another new rivalry among ‘vibe coding’ app builders. And then there’s Decagon vs. Sierra in customer support agents.
To Upstarts, this customer support face-off is fascinating. Unlike vibe coding, customer service isn’t a new category where measuring efficiency can also depend on vibes. Software companies like Salesforce, Zendesk and Intercom have sold chatbots and ticket managers since long before the generative AI boom. It’s highly measurable, too, with clear resolutions (or customer complaints) and outcomes.
For venture capitalists and industry peers, Decagon and Sierra are natural foils. Sierra’s co-founded by ex-Salesforce co-CEO and OpenAI chairman Bret Taylor and former Google Labs chief Clay Bavor, with a bevy of powerful backers. A few months older, Decagon is led by Jesse Zhang and Ashwin Sreenivas, both co-founders of previously acquired startups, but younger and lesser-known among the establishment.
Both have raised vast amounts of money: Sierra took in $175 million at a $4.5 billion valuation in October; Decagon has raised $100 million in total announced funding before a current, widely-rumored fundraise at a $1.5 billion valuation that was first reported by Forbes.
Upstarts has independently confirmed that report with multiple industry sources, who say that Decagon is still raising at the $1.5 billion valuation, but with the round likely coming in a bit larger than $100 million. Decagon declined to comment on the round.
Programming note: Upstarts Media is hosting our first NY Tech Week event on June 2: a tactical event for early-stage founders on fundraising. Founders can apply for free admission here.
Each company is taking a seemingly different approach to deploying with customers – Decagon opting for speed, Sierra for depth. But good narrative aside, they’re not not a duopoly just yet. Intercom is still growing its AI agent, Fin; Forethought, another agentic AI startup I covered at Forbes back in 2020, announced a $25 million Series D earlier in May and says it can win head-to-head against the best.
So if this two-horse race is more like a full derby, how exactly are the startups looking to separate from the field? And what does it mean for the rest of us?
Upstarts checked in with Decagon’s CEO Zhang, Sierra’ co-founder Bavor, Forethought’s cofounder and chairman Deon Nicholas, and Intercom’s co-founder and CEO Eoghan McCabe, as well as industry peers, to cap the current odds.