Facebook Buys Kustomer | Facebook buys online customer service startup Kustomer

Facebook buys kustomer, which is a startup, designed with the intention of disrupting the customer services industry with a new approach. It is meant, to offer agents with better data, and a more unified picture of users by bringing together the many social media and other channels and longer history between and the said company.

Even though the terms of the acquisition have not been disclosed, confirmed sources very close to the deal, say that it was for $1 billion. Reports of the deal (and alleged price) were published earlier by the WSJ.

Kustomer is co-founded by CEO Brad Birnbaum and Jeremy Suriel. This duo has worked together across a range of other places, including Airtime and AOL, and had sold a previous startup to Salesforce. The pair had raised around $174 million in private funding from investors which included Coatue, Tiger Global Management, Battery Ventures, Redpoint Ventures, Cisco Investment, Canaan Partners, Boldstart Ventures, and Social Leverage.

Facebook Buys Kustomer

The acquisition of Kustomer by Facebook Inc., a New York-based software company, is to help businesses manage customer conversations from multiple sources on one dashboard.

Facebook, is making this deal, to bolster efforts to monetize its messaging business, which is expanding to include customer service products that help companies interact with people through chat apps like WhatsApp and Messenger.

Having made customer service an integral part of its business strategy on WhatsApp, which is the world’s most popular service. Facebook has gained deals with Commerce-related businesses in India and Indonesia, and is currently, working on a payment feature, to launch in key markets like Brazil. It is projecting, those one-day businesses will use WhatsApp as their de facto website. This will allow customers to browse their product catalogs, make purchases as well as interact directly with companies for customer service needs all from the app.

Facebook Buys Kustomer

Currently, WhatsApp makes money by charging large businesses, to message customers on the app in lieu of email. Kustomer, and some other customer service platforms, use WhatsApp software, to enable businesses to manage these interactions on a single interface. According to Facebook executives, Kustomer will continue to operate the business as usual, while the acquisition goes through regulatory review.

Currently, it is still unclear whether regulators will take issue with the deal. Already Facebook is already under antitrust scrutiny for previous acquisitions, including its 2014 purchase of WhatsApp. However, competing customer service businesses will still be able to offer WhatsApp corporate messaging, even though Facebook will now own one of those tools itself, as stated by WhatsApp Chief Operating Officer Matt Idema.

According to WhatsApp Chief Operating Officer Matt Idema, “This is a big space”. “This is adding a tool for a specific segment but we want to continue to enable to the whole market”. Kustomer has more than 200 employees and works best with businesses that require 20 to 100 customer service agents, added Idema.

Purpose (Facebook Buys Kustomer)

The aim of this deal by Facebook is to better integrate messaging across its platforms and may help marketers especially smaller businesses with fewer financial resources and technological know-how, to manage online conversations, as well as improve their communications with customers.

Facebook, has observed on WhatsApp, that companies need more ways of managing those conversations and automate them with chatbots whenever possible, with the millions of people using messaging apps to chat with businesses.

On the other hand, Kustomer’s own research, found that 79% of consumers get frustrated when they can’t contact customer service on their preferred medium or platform, but only 25% of customer service organizations currently, make use of chat, and 18% use chatbots. Businesses are not adopting chat because they don’t know where to start, have the staffing or financial constraints, or think customers do not want to use the services.

When Facebook is able to make chat services as accessible to businesses as it has its self-service advertising platform, more companies are likely to adopt the technology, including retailers increasingly looking to reach shoppers online.

As Facebook extends its efforts to bringing commerce to its messaging channels like WhatsApp and Messenger, it will have to conform to the reality that conversations with the modern consumer happen across devices, channels and platforms” Kerel Cooper, senior vice president of global marketing at LiveIntent, said in a statement shared with Mobile Marketer.

Facebook, already worked with Kustomer in giving businesses a medium of gathering and responding to customer questions sent via Facebook Messenger. In October, Kustomer announced that it integrated its platform with Instagram Messaging, the chat service that has become a more prominent part of the Facebook-owned photo-sharing app.

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