Capacity, the St. Louis-based artificial intelligence software startup led by serial entrepreneur and former Answers CEO David Karandish, plans to grow its team and expand its technology after closing its Series C financing.
The startup said Wednesday it has closed out the funding round with $38 million, raising an additional $27 million since announcing in October 2020 it had raised $11 million as part of the Series C financing. Undisclosed existing investors led the round, Capacity said. The funding round brings Capacity total capital raised to $62 million and follows an $8.4 million in Series A funding in 2018 and a $13.2 million Series B round in 2019.
Founded in 2017 by Karandish and fellow entrepreneur Chris Sims, Capacity has developed an AI-enabled “help desk” technology that’s designed to capture and collect an organization’s information from various sources to automate support for employees or customers.
For Capacity, the fresh funding comes as it says it has experienced rapid revenue growth, with its annual recurring revenue climbing 124% year over year. The startup does not disclose specific revenue figures.
“We’re seeing an unprecedented explosion in companies that want to automate their support,” said Karandish, Capacity’s CEO.
As it continues to pursue growth, Capacity expects to add 20-plus employees to its workforce this year. It currently employs 87.
Capacity’s own growth is occurring as the artificial intelligence software market is expected to balloon in the upcoming years. A recent study finds it will be a $126 billion market by 2025, up from a projection of $60 million when Karandish unveiled his startup in 2018.
The software developed by Capacity is used by businesses and organizations in several fields, including financial services, higher education, health care and software. For example, Capacity has said its software is used by 25-plus mortgage lenders to answer questions posed by home loan borrowers and to automate back-end functions to accelerate the lending process.
With its Series C funding, Karandish said Capacity plans to expand its technology’s ability to answer questions, automate back-end functions and support companies’ internal processes and client interactions.
“We’ve been moving from having a product suite of great, individual products to a full-fledged platform,” Karandish said.
