Deepgram Secures $130 Million Funding and Acquires Y Combinator AI Startup
In a significant move within the voice AI industry, Deepgram has successfully raised $130 million in a Series C funding round, elevating its valuation to $1.3 billion. This round was spearheaded by AVP, with continued support from existing investors such as Alkeon, In-Q-Tel, Madrona, Tiger, Wing, and Y Combinator. New investors, including Alumni Ventures, Columbia University, Princeville Capital, Twilio, and SAP, also participated, bringing Deepgram’s total funding to over $215 million.
This substantial investment reflects the growing demand for voice AI technologies across various sectors, including sales, marketing, customer support, and consumer applications. The trend of significant funding in the voice AI space is evident, with companies like Sesame securing $250 million in a Series B round, ElevenLab raising $180 million in a Series C, and Gradium obtaining a $70 million seed round.
Elizabeth de Saint-Aignan, a partner at AVP, highlighted the increasing integration of voice AI in enterprise operations. She noted that many enterprises are leveraging voice AI in contact centers and sales development processes, with Deepgram’s technology playing a pivotal role in these implementations.
Deepgram offers a suite of models encompassing text-to-speech and speech-to-text capabilities, along with platforms and APIs designed for conversational speech recognition and low-latency interruption handling. Over 1,300 organizations, including meeting notetaker Granola, voice agent startup Vapi, and Twilio, utilize Deepgram’s voice AI products and models.
CEO Scott Stephenson emphasized that the company was already cash flow positive prior to this funding round. He stated that the mainstream adoption of voice AI presents an opportunity for accelerated growth through larger investments. The influx of strategic investors who understand the technical intricacies of voice AI and have established relationships with companies building on this technology further strengthens Deepgram’s position.
The newly acquired funds will be directed towards expanding Deepgram’s global presence and enhancing support for multiple languages. A key focus area is the restaurant industry, where Deepgram aims to revolutionize food ordering through voice AI. To advance this initiative, Deepgram has acquired Y Combinator-backed OfOne, a startup that developed a voice AI-powered solution for quick-service restaurants, boasting over 93% accuracy in order processing.
Stephenson expressed enthusiasm about the potential of voice AI in food ordering, suggesting that it could serve as a positive introduction to voice AI for many Americans. He acknowledged past challenges with voice AI in the restaurant sector but believes that natural conversation-based ordering can provide a magical experience for users.
Investor interest in voice AI continues to grow, as evidenced by Presto, a company serving brands like Carl’s Jr., securing $10 million in new funding. Analysts project the voice AI market to expand at over 30% annually, reaching a valuation between $14 billion and $20 billion by 2030. This growth trajectory positions model and API providers like Deepgram to become multibillion-dollar entities by serving as core components for enterprises and startups developing voice solutions.
