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Talkdesk Announces Eye-Raising Series C Funding Round
Talkdesk today announced that it has raised $143 million in Series C funding from a combination of new and existing investors. If that dollar figure isn’t mind-boggling enough, the subtitle of today’s press release provides another astonishing statistic. This round assumes a Talkdesk valuation of over $3 billion.
Can it be not even two years ago that Talkdesk announced its Series B round of funding: $100 million and a $1 billion valuation? Yes, that was in October 2018. This latest round brings total venture capital funding in Talkdesk to $267 million, including the $21 million Series A funding in October 2015 and initial angel investments.
Both the size of the 2020 investment and the valuation reflect strong investor confidence not only in the customer experience market but also in Talkdesk’s ability to perform well in a segment with, as the investor analysts say, significant tailwinds.
To put this latest valuation in context, I pulled up several data points from public companies competing directly with Talkdesk. This week, Five9’s market capitalization is hovering around $7.5 billion; a year ago it was $3 billion. NICE, which includes Talkdesk competitor NICE inContact, has a current market cap of $12.8 billion, up from $9.1 billion a year ago.
Today’s announcement raised a few questions that I addressed with CEO Tiago Paiva via email. First, I asked when the market can expect a Talkdesk IPO — given that a new round of funding begs the question. Paiva’s response: "As you know, we are a private company so I can't speak to future financing plans, but I can tell you that I intend on making Talkdesk the most successful contact center company in the world, and I will do everything it takes to make that happen." Net-net? No new news there, but as a good analyst should, I tried.
I next asked whether the pandemic had a positive or negative impact on Talkdesk’s ability to plan for an IPO. "It has been a true honor and privilege to help and support so many companies maintain a sense of normalcy through the last few months,” Paiva answered. “We are and have always been customer obsessed. When we started Talkdesk, our mission was to help organizations around the world build brand love and loyalty by delivering exceptional customer experiences. Even through the pandemic, we have upheld — and even exceeded — that commitment." As a good CEO should, Paiva took the opportunity to reinforce Talkdesk’s support of its customers through the crisis, while continuing to avoid the IPO question.
Finally, over the past two weeks, competitor back channels have been swirling with discussion of an article listing Talkdesk as having applied for and received $5 to $10 million in loan funding from the Small Business Administration’s Paycheck Protection Program, or PPP. Talkdesk responded to a question about the article as such: “We submitted an application to receive funding as part of the Paycheck Protection Program in the earlier part of the pandemic when the long-term impact of the pandemic on Talkdesk’s business was uncertain. Talkdesk did not complete paperwork as part of that process and has not received any funding; our financials are healthy so there is no need for government money.”
As I discussed in my market report session at the March Enterprise Connect Virtual event, the pandemic has upended popular notions of how quickly the market will shift from premises to cloud contact center applications (see related post). Part of that is a result of the temporary shift to work-from-home agents; success here likely portends a longer-term shift to more home agents, which are simply more easily supported via cloud solutions.
Talkdesk will address the topic in the session, “The CX Reframe: Planning for the New Normal of the Contact Center,” on Monday, Aug. 3, at 11:00 a.m. to 11:30 a.m. ET, as part of the weeklong Enterprise Connect Digital Conference & Expo event. Check out the full event here, and join the session!