Malaysia’s AI agent-powered messaging app Respond.io raises $62.5M, eyes acquisitions

At a glance:

• Respond.io secures $62.5M Series B to scale AI-driven customer messaging platform
• 169% year-over-year ARR growth to $35M with 30% profit margin
• Targets Europe and North America for expansion via strategic acquisitions

What happened

Founded in 2017, Respond.io has emerged as a standout Malaysian tech success story by addressing the challenge of businesses struggling to manage customer interactions across messaging platforms. The Kuala Lumpur-based company recently closed a $62.5 million Series B funding round led by Camber Partners, with additional support from Endeavor Catalyst and existing investors. This follows a $7 million Series A in 2022, underscoring investor confidence in the platform's trajectory. With $35 million in annual recurring revenue (ARR) and a 169% year-over-year growth rate, the company maintains a 30% profit margin, according to TechCrunch.

The platform serves mid-to-large B2C enterprises, particularly in high-consideration sectors like healthcare, automotive, retail, education, and travel. These businesses rely on conversational engagement before purchase decisions, making Respond.io's multi-channel approach critical. The company processes 2 billion messages quarterly, leveraging AI agents to automate customer inquiries, qualify leads, and close sales without human intervention. Its pricing model, based on conversation volume rather than per-seat licensing, differentiates it from traditional enterprise software competitors.

Why it matters

Respond.io's growth comes amid rising questions about whether general AI tools like ChatGPT could displace specialized platforms. CEO Gerardo Salandra argues that the company's early entry and data flywheel—where increased message volume improves AI performance, attracting more customers—creates a defensible moat. Unlike legacy systems built around email and phone calls, Respond.io was designed natively for messaging channels, including WhatsApp, Instagram, TikTok, Messenger, Line, Telegram, WeChat, voice calls, and web chat.

The company's current revenue breakdown shows 30% from APAC, 30% from Latin America, 20% from the Middle East and Africa, and 20% from North America and Western Europe. However, Salandra notes that the latter regions are now its fastest-growing markets, driven by rapid adoption of messaging channels. He anticipates North America and Europe becoming the largest segments within two to three years.

Expansion strategy

With the new capital, Respond.io plans to prioritize hiring, organic growth, and acquisitions. Salandra has identified two acquisition targets: bolt-on technologies that integrate into its ecosystem and established teams with strong customer bases in Europe and North America. These moves aim to accelerate market penetration, with the CEO estimating that acquisitions could save six months to a year in development time.

Despite the funding, Salandra emphasizes disciplined growth over rapid expansion. He remains cautious about market dynamics but has set an ambitious long-term goal: taking the company public on Nasdaq. The team's background includes Salandra's experience at IBM and Google, alongside co-founders Hassan Ahmed (CTO) and laroslav Kudritskiy (COO), who relocated the business from Hong Kong to Malaysia in 2019.

Competitive landscape

Traditional customer service platforms, particularly those dominant in North America and Europe, were built for email and phone interactions. Salandra criticizes these systems as treating messaging as an afterthought, leaving room for Respond.io's specialized approach. The company's data flywheel effect—where more messages enhance AI capabilities, attracting more customers and generating further data—positions it as a leader in the evolving messaging-first economy.

The rise of AI has intensified scrutiny on platforms like Respond.io, but Salandra sees opportunity rather than threat. He highlights that AI adoption accelerates the company's growth, contrasting with the stagnation in public SaaS markets. This resilience stems from its unique pricing model and deep integration with messaging ecosystems, which legacy systems struggle to replicate.

Future outlook

Respond.io's expansion into Europe and North America aligns with its goal of capturing emerging markets where messaging adoption is accelerating. The company's focus on high-consideration industries ensures steady demand, while its AI agents reduce operational costs for clients. Salandra's vision of an IPO reflects confidence in the platform's scalability and the growing importance of conversational commerce.

The startup's journey from Hong Kong to Malaysia illustrates the region's rising prominence in tech innovation. With a proven track record and strategic funding, Respond.io is poised to challenge established players while navigating the complexities of global expansion and AI-driven competition.