Artificial intelligence startup Sierra has raised nearly $1 billion in a new funding round, CNBC has learned, as venture capital investors look for winners in ongoing deals.
The San Francisco-based company has brought in $950 million in new capital, led by Tiger Global and Google’s GV, at a post-money valuation of $15.8 billion. Benchmark, Sequoia, Greenoaks and other existing investors also participated.
The startup was founded three years ago by the chairman and former chairman of OpenAI. sales force Co-CEO Brett Taylor and his predecessor google Executive Clay Baber. Taylor was also chief technology officer. facebookand chairman of Twitter when Elon Musk acquired the social media network. Sierra’s founders came together at Google, with Taylor contributing to the creation of Google Maps and Bavor being primarily credited with leading the virtual reality efforts and Google Labs.
Sierra sells AI customer service agents and positions itself as a leader in a new class of software companies built on the foundational models of OpenAI and Anthropic. According to Taylor, the company leverages “model suites” with its own fine-tuned proprietary layers.
Sierra generated more than $150 million in annual recurring revenue (ARR) in eight quarters, according to the company. This growth schedule is unprecedented for traditional software and highlights “intense market demand,” Taylor said.
“There’s a really large addressable market and a pressing opportunity,” Taylor said. “We’re kind of taking the last remaining analog channel, the phone line, and digitizing it. It’s a better experience. You don’t have to be put on hold. These agents are naturally multilingual.”
Taylor estimates that $400 billion is spent annually on customer service. A large part of that is moving to AI agents, he said.
AI contest
The funding round is the latest deal in what has been a hot area for investors. Deals of this size have come to define the venture landscape these days, as investors flock to what they see as category leaders. There’s also a desire to help companies beyond giants like OpenAI and Anthropic, which are approaching $1 trillion in valuations.
Taylor explained that trending AI coding agent companies like Cursor and Replit are the largest segment of the market, followed by customer service agents. The new cash injection is aimed at maintaining its lead in an increasingly crowded field, he said.
“There’s a lot of competition. We’re many times larger than the next largest company, and we’re investing aggressively to continue to grow our lead,” Taylor said.
Sierra’s customers primarily include: prudential, SignaBlue Cross Blue Shield, rocket mortgageas well as one-third of the world’s largest banks. Taylor said the startup serves more than 40% of Fortune 50 companies.
Benchmark general partner Peter Fenton was one of Sierra’s first investors and also participated in the Series E. He pointed to the startup’s revenue momentum and how long it took previous generations of software companies to reach the same milestones.
“It’s ridiculous that it happened so quickly,” Fenton said in an interview. “When measured by objective facts such as revenue size and quality of customer base, Sierra is a winner in the ‘customer experience’ category by every measure.”
Fenton said the size of this funding round will help Sierra maintain its lead.
Fenton said the startup has also been able to court and quickly onboard traditional companies that aren’t always quick to adopt technology.
“Some industries that have historically been slow to adopt are realizing that a watchful-and-wait approach in AI is a path to extinction.”
Taylor is at the center of the AI boom as chairman of OpenAI. He likens the current AI boom to the early days of the internet, saying it will create a new generation of trillion-dollar giants. Still, he expects the market to correct within the next two years.
“When you have this much genuine excitement in the market, you end up with too much capital and too many companies,” Taylor said, predicting a “weed-out effect” where capital outside of market leaders dries up.
For Sierra, that means staying private for now. Taylor said an IPO is “definitely in our future,” but believes being private is an advantage and a buffer as the company weathers the growing pains of rapidly scaling up.
