The use of voice AI in sales, marketing, customer support, and consumer applications has increased significantly in recent years. This surge has led to growing business for model providers and heightened interest from investors. Capitalizing on this demand, Deepgram has announced a raise of $130 million in a Series C funding round led by AVP, achieving a valuation of $1.3 billion.
The round included additional investments from existing backers such as Alkeon, In-Q-Tel, Madrona, Tiger, Wing, and Y Combinator. It also attracted new investors like Alumni Ventures, Columbia University, Princeville Capital, Twilio, and SAP. To date, Deepgram has raised over $215 million in total funding.
This fundraising continues a trend of substantial investments in voice AI from the past year, which included notable rounds for other companies such as Seasame, ElevenLabs, and Gradium.
Elizabeth de Saint-Aignan, a partner at AVP, explained that conversations with enterprises about their AI usage frequently highlighted voice AI, particularly in areas like contact centers and sales development. These discussions revealed that Deepgram’s technology often powered these solutions, which led the fund to invest.
She noted that voice AI has the potential to improve customer interactions while reducing operational costs, with Deepgram positioned to play a central role in this shift.
Deepgram offers a suite of models for text-to-speech and speech-to-text, along with platforms and APIs for conversational speech recognition and low-latency interruption handling. The company reports that more than 1,300 organizations use its products, including Granola, Vapi, and Twilio.
The company’s CEO, Scott Stephenson, stated that Deepgram did not need to raise funds, as it was cashflow positive last year. However, with voice AI going mainstream, the company saw an opportunity to accelerate growth through strategic investment. He emphasized that the initiative came from interested investors and that Deepgram sought partners with a deep understanding of voice AI technology.
The new capital will be used to expand Deepgram’s global presence and improve support for multiple languages. The company is also focusing on the restaurant sector through voice AI. To advance this goal, Deepgram has acquired Ofone, a Y Combinator-backed company that built a voice AI solution for quick service restaurants, claiming over 93% order accuracy.
Voice AI in restaurants has faced challenges, as illustrated last year when Taco Bell ended an experiment after a person ordered 18,000 water cups. Stephenson expressed excitement about voice AI-driven food ordering, suggesting it could be a positive first interaction with the technology for millions of people, moving past previous unsatisfactory experiences with earlier voice assistants.
Investor interest in the sector remains strong, with news of Ofone’s acquisition following Presto, another restaurant AI provider, securing $10 million in new funding.
Analyst reports project the voice AI market to grow at over 30% annually, becoming a $14 to $20 billion market by 2030. At this growth rate, model and API providers like Deepgram aim to become multibillion-dollar companies by serving as core components for enterprises and startups building voice solutions.