Respond.io Secures $62.5M Funding to Expand Through Strategic Acquisitions

In 2017, Respond.io was launched with a straightforward goal: addressing the challenge that businesses struggled to keep up with customers who had shifted their communication to messaging apps. Today, Respond — through its customer conversation management software — has emerged as one of Malaysia’s notable tech success stories.

Headquartered in Kuala Lumpur, the startup secured $62.5 million in funding during its Series B financing round, led by Camber Partners with participation from Endeavor Catalyst and existing investors. It had previously raised $7 million in its Series A round back in 2022. According to reports shared with TechCrunch, the company has now achieved annual recurring revenue of $35 million, representing a 169% year-over-year increase, alongside a 30% profit margin.

Gerardo Salandra, the co-founder and CEO who previously worked at IBM and Google before joining Runtastic — a fitness tracking app that was acquired by Adidas in 2015 — founded Respond in Hong Kong in 2017 alongside Hassan Ahmed (CTO) and laroslav Kudritskiy (COO). The team moved the business to Malaysia two years later.

The platform assists mid-to-large B2C businesses in generating revenue from customer conversations across a range of messaging channels, including WhatsApp, Instagram, TikTok, Messenger, Line, Telegram, WeChat, voice calls, and web chat. It also leverages AI agents to automatically handle large volumes of customer inquiries, qualify leads, and close sales without requiring human intervention.

Salandra describes the company’s core customers as those in “high-consideration” industries where buyers need to engage with someone before making a purchase, such as healthcare, automotive, retail, education, and travel. He explains that purchasing a car doesn’t involve simply entering credit card details on a website; instead, consumers typically discuss options with representatives and ask numerous questions first. The company’s ideal client base consists of organizations with 200 to 10,000 employees.

The growing prominence of AI has raised a significant question for platforms like Respond: could tools such as ChatGPT eventually replace the solutions they have developed? Salandra believes the company’s strong position gives it the ability to withstand such competition if it arises. Currently, the platform processes 2 billion messages each quarter.

“If I focus solely on the numbers, the faster AI becomes more prevalent, the quicker we grow,” he told TechCrunch. “Our growth trajectory is not aligned with what’s typical in the broader SaaS market.”

One factor contributing to this growth pattern is pricing, he notes. Unlike many enterprise software competitors that charge per user seat, Respond charges based on the volume of customer conversations, regardless of whether human or AI agents are handling them. “When fewer humans use a product, their revenue decreases,” he says. “But we don’t operate on that model.”

The existing platforms, particularly those dominant in North America and Europe, were originally designed around email and phone calls. “The current solutions added messaging as an optional feature later on,” Salandra explains. “They are heavily focused on email and phone interactions, with messaging treated as an afterthought.”

According to the CEO, this high volume of message data creates a positive feedback loop: more messages lead to improved AI performance, better AI attracts additional customers, and these new customers generate even more messages. “This is what we refer to as the data flywheel,” Salandra says. He adds that this early advantage also gives emerging AI companies an edge, as they can build superior AI capabilities due to their longer history and stronger foundation.

With the newly raised capital, Salandra plans to focus on hiring, organic growth, and strategic acquisitions. The company is targeting two types of acquisition targets: technologies that can be integrated into its existing ecosystem and established teams with strong customer bases in key markets such as Europe and North America. “Just imagine how much time I could save if I found a company that already has clients and a capable team,” he says. “An acquisition could help me avoid six months to a full year of development work.” He confirmed that the company is already in discussions with several potential targets.

Expanding geographically makes strategic sense from a business perspective. Currently, Respond generates roughly 30% of its revenue from APAC, 30% from Latin America, and 20% from the Middle East and Africa, while North America and Western Europe account for only 20%. However, Salandra says these regions are now growing at the fastest pace. “It took them longer to shift to messaging channels, but they are now advancing rapidly in this area,” he notes, adding that he expects both regions to become the company’s largest revenue sources within two to three years.

Despite the recent capital injection, Salandra remains cautious about future expansion. “We don’t want to prioritize growth at all costs,” he says. “Even with this funding, we will maintain a disciplined approach.” Nevertheless, he has larger ambitions in mind. “What I envision most?” he asks. “Is ringing the bell at Nasdaq.”