In 2017, Respond.io set out to solve a simple problem. The problem is that businesses can’t keep up with customers who have switched to messaging apps. Today, Respond has become one of Malaysia’s technology success stories with its customer conversation management software.
The Kuala Lumpur-based startup raised $62.5 million in a Series B round led by Camber Partners with participation from Endeavor Catalyst and existing investors. It last raised $7 million in Series A funding in 2022.. According to TechCrunch, the company has grown to $35 million in annual recurring revenue (ARR), a 169% year-over-year gain and a 30% profit margin.
Co-founder and CEO Gerardo Salandra, who worked at IBM and Google before joining fitness tracking app Runtastic, which was sold to Adidas in 2015, founded Respond in Hong Kong in 2017 with Hassan Ahmed (CTO) and laroslav Kudritskiy (COO). The team moved the operation to Malaysia two years later.
The platform helps mid- to large-sized B2C businesses monetize customer conversations across multiple messaging channels, including WhatsApp, Instagram, TikTok, Messenger, Line, Telegram, WeChat, voice calls, and web chat. We also use AI agents to automatically process high volumes of customer inquiries, qualify leads, and close sales without human intervention.
Salandra described its core customers as “high consideration” businesses where customers need to talk to someone before making a purchase, such as healthcare, automotive, retail, education and travel. “You don’t just go to a website, put in your credit card and buy a car, you chat with someone and ask a lot of questions,” he said. The best places are companies with 200 to 10,000 employees.
The rise of AI raises obvious questions about platforms like Respond. Can a tool like ChatGPT simply replace what you’ve built?
Salandra believes her base is strong enough to fend off such an invasion should it come. The company currently processes 2 billion messages per quarter.
“If you just look at the numbers, we are growing faster every day as AI becomes more prominent,” he told TechCrunch. “We’re not seeing what the public SaaS market is seeing.”
Part of that depends on pricing, he said. Unlike enterprise software competitors that charge per seat, Respond charges based on the volume of customer conversations. In other words, it doesn’t matter whether a human or AI responds. “If fewer people use your product, you make less money,” he said. “But we don’t charge that.”
Existing platforms, especially those dominant in North America and Europe, are built around email and phone calls. “The platforms that exist have reconsidered messaging. They focus on email and calls, but when it comes to messaging, it’s an afterthought,” Salandra said.
According to the CEO, these large volumes of message data create a feedback loop. The more messages you have, the better the AI will be. Better AI attracts more customers. More customers generate more messages. “This is what we call the data flywheel,” Salandra said. He added that a head start is also important for new AI companies. “Because we started so long ago and have a solid foundation, we can deliver better AI than someone who is just starting out in the messaging space.”
Salandra said that with the new capital, the company plans to pursue hiring, organic growth and acquisitions. CEOs have two types of purchasing goals in mind. The goal is to build a team with additional skills that fit into the existing ecosystem and a strong customer base in strategic markets such as Europe and North America. “Imagine the months you could save if you found the right company that already had customers and a team in place,” he said. “An acquisition can save you six months to a year.” He confirmed that the company is already in talks with several potential targets.
The geographic push makes strategic sense. Respond currently generates approximately 30% of its revenue from APAC, 30% from Latin America, 20% from the Middle East and Africa, and only 20% from North America and Western Europe. But Salandra says this region is currently growing the fastest. “It took longer to change, but now we’re transitioning to messaging channels very quickly,” he said, adding that he expects the two regions to become the company’s largest segments within two to three years.
Despite the new capital injection, Salandra is cautious about what happens next. “We don’t want to be a company that grows at all costs,” he said. “Even if we had this money, we would still apply very strict discipline.” But Salandra has bigger plans in mind. “What is my favorite result?” he said “Ringing the bell on Nasdaq.”
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