St. Louis-based software startup Balto has raised $37.5 million in a Series B funding round it says will accelerate its rapid growth.
New York-based investment firm Stripes, a new investor in Balto, led the financing. Another new investor in the round is RingCentral Ventures, the venture capital arm of Belmont, California-based telecom company RingCentral (NYSE: RNG). The financing also involved several existing investors, including St. Louis-based Cultivation Capital, Sierra Ventures, TIA Ventures, OCA Ventures, Stage Venture Partners, SaaS Venture Capital, Sandalphon Capital and Atreides Management.
Balto’s Series B funding brings its total capital raised to $52 million since its launch and follows a $10 million Series A financing closed in October 2020. Founded in 2017, Balto has developed “real-time call guidance” software used by contact centers. Its technology is designed to provide real-time guidance and coaching for customer service agents and sales representatives while they are on calls. The company says its technology has provided guidance on more than 75 million calls and made 160 million recommendations in real time.
Balto has been among St. Louis’ fastest-growing startups, growing to a team of roughly 110 employees. Its workforce has more than doubled in the past year and is up from 13 employees when Balto announced its $1.2 million seed round in October 2018. About half of Balto’s workforce is based locally, co-founder and CEO Marc Bernstein said. The startup earlier this month moved into a new headquarters located in Downtown West.
Co-founder and Chief Operating Officer Chris Kontes said Balto’s Series B round was necessitated by significant investments it recently made in its product development and go-to-market strategy. Kontes said the firm has more than doubled its engineering team since January as it sought to expand its product offering.
“They’ve been working basically nonstop for 120 straight days to get a new product release out at the beginning of last week,” he said.
Balto earlier this month announced the launch of its new real-time coaching and real-time QA products. Its real time coaching is designed to provide managers with a notification when one of their agents needs help on a call, while its real-time QA offering is built to automatically score calls. Balto’s expansion comes as the startup has experienced an uptick in its customer count and revenue in recent years, Bernstein said. The startup does not disclose specific revenue figures, but he said the company is growing about two to three times annually.
Bernstein said the Covid-19 pandemic has placed greater importance on contact centers, making its software more valuable to customers.
“There is a massive economic transformation going on right now, where people used to go buy things and get their products serviced and get services in person,” Bernstein said. “You would go to our local brick-and-mortar location and that’s how you would get your stuff done. During Covid, that got completely clamped down, but all of that traffic still had to go somewhere, so it went to self-service options online and it went to the contact center.”
Kontes said Balto plans to continue expanding its product development and go-to-market initiatives to chart growth. It expects its headcount to continue to increase with the company possibly topping 200 employees in the coming months. Longer term, Balto envisions becoming St. Louis’ next unicorn — a company valued over $1 billion
“That’s not a six-month goal. It’s a 2025 goal, but that’s the goal. That’s what we’re building toward,” Kontes said.
