Kustomer sells customer-service software to businesses so they can communicate with consumers by phone, email, text messages, WhatsApp, Instagram and other channels. 

Background:

Customer-service software has long been a massive part of the cloud TAM – Salesforce’s Service Cloud is actually larger than the company’s Sales Cloud–but despite the seeming maturity of the segment, shifting consumer expectations have transformed the category and created space for disruptive, new market entrants.

Battery originally invested in Kustomer in January 2019. What immediately struck us about Kustomer was the deep domain knowledge of the founders Brad Birnbaum and Jeremy Suriel, who together had been building customer experience and customer service software companies for more than 20 years. We felt  they had extensive knowledge of the industry and clarity in their founding vision: That most customer-experience (CX) platforms are fundamentally architected the wrong way. Namely, their core objective is to handle and clear service “tickets.” Kustomer, as the name suggests, fundamentally architects not around the ticket but around the “customer.” All cases, messages, and other forms of data tie back to that person. This approach allows Kustomer, in our view, to deliver a fundamentally different service experience.

The Battery Impact:

• Battery knew the Kustomer founders Brad and Jeremy well. With a stage-agnostic, research-driven approach to investing, Battery had done extensive research on the customer-service software landscape, the forces driving its evolution and the companies to watch. So, when the opportunity to invest arose, Battery was able to make a very quick decision, moving from deep dive meetings with the founders to delivering Kustomer a term sheet in 24 hours.
• Battery General Partner Neeraj Agrawal was a key advisor to the management team as a member of the Kustomer board. When the company received M&A interest, he worked closely with management on the company’s positioning and thesis, evaluating its many options and ultimately helping navigate the M&A process.

Outcome:

In November 2020, Facebook (now Meta) announced its intent to acquire Kustomer. Following regulatory review, the acquisition closed in Q1 of 2022. Terms of the transaction were not disclosed.