Public Markets

Electric AI Raises $9.25M Series A To Grow Chat-Driven IT Support

For those of you who have only done tech support for relatives during the holidays, imagine the logistical challenge of serving the needs of a whole company, even a small one.

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Enter Electric, an NYC-based company that provides tech support, not in person or by phone, but via a chat interface integrated into Slack.

Fresh Capital

This week, Electric closed a $9.25 million Series A round led by Bessemer Venture Partners. Bowery Capital and Primary Venture Partners, two investors from Electric’s seed round, followed on as participants in the company’s Series A. Electric’s founder and CEO, a serial entrepreneur named Ryan Denehy, said that “getting a firm like Bessemer onboard is a huge vote of confidence and sets us up to execute on next steps.”

Robert Goodman from Bessemer is joining the company’s board, where he’ll join three others:

  1. Michael C. Brown, Jr., the founder and managing partner of Bowery Captial.
  2. Brad Svrluga, co-founder and general partner at Primary Venture Partners.
  3. Rudd Davis, currently the founder and CEO of Blackbird.

Davis was Denehy’s co-founder on two previous startups. One was a media company, BNQT Media Group, to the corporate parent of the USA Today newspaper. The second was a retail analytics platform called Swarm Mobile later sold to Groupon in late 2014, reportedly for north of $30 million.

Building Better Support

Denehy told Crunchbase News that “businesses are buying and using more tech than they ever have before, but IT support hasn’t changed in twenty years.”

Denehy said that the market for supporting small and medium-sized businesses’ IT needs is very decentralized.

“There are over 100,000 independent IT consultancies” in the US, he said, “and they’re serving a market of about one million small businesses that don’t have full-time IT staff.”

Denehy characterized the IT status quo as expensive, slow, and reactive, and he strives to provide the opposite: a fast, proactive support experience that’s affordable for small businesses.

Currently, and likely for some time into the future, Electric’s platform, which Denehy described as “AI-driven” is also assisted by humans. For now, Electric is “focused on automating the most repetitive and most common tasks.” Denehy added that “about 50 percent of support tickets aren’t about fixing broken things, but doing stuff like setting up an email address, turning on a firewall, or connecting to an enterprise platform.”

Those common, routinized issues are increasingly addressed without human intervention. But Electric also handles more complex issues by escalating to a technician when necessary. Over time, Denehy hopes that even these complicated tasks can be automated away from human support staff to increase the speed to resolution.

A Few Steps Ahead

Denehy credits his company’s growth to the fact that he tries to think as many steps ahead as possible in order to avoid making reactionary moves. However, Denehy acknowledged to Crunchbase News “that’s easier said than done.”

In the fourteen months since the company was launched, headcount has grown to dozens of people, and annual revenues are in the low seven-figures. Electric plans to use its new capital to grow its business by at least four-fold this year, both in terms of recurring revenue and customers.

He said that one of the biggest challenges he’ll face is scaling his business up in a sustainable way that doesn’t compromise on Electric’s high standard for customer service. Balancing the growth of three teams – engineering and product, sales and marketing, and the IT experts themselves – isn’t going to be easy.

But if Denehy and team are able to do so, he sees smooth sailing ahead. With no clear competitors building human-assisted AI-driven IT solutions for small and medium-sized businesses, Electric’s only serious competition are “mom and pop IT shops” in a business it hopes to reinvent.

Correction: BNQT Media was the name of Denehy’s previous startup, not the name of the acquiring entity.

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