Zendesk, the customer service platform that launched in 2007, has been on a mission to revolutionize the industry. It’s no surprise that the company is now looking towards the rise of generative AI as a major factor in reshaping customer service.
On Wednesday, Zendesk announced its plans to acquire Ultimate, a German startup specializing in customer automation. While the details of the purchase price were not disclosed, it’s clear that Zendesk sees great potential in this new partnership.
In recent years, the idea of AI agents has gained traction as companies seek to create bots that not only provide answers, but also address issues by connecting to back-end transactional systems. This year, Bret Taylor and Clay Bavor launched Sierra, a new company focused on building flexible AI agents.
Zendesk describes Ultimate as an “automation platform [that] integrates with any backend system and provides robust analytics and reporting.” The company envisions a future where customer inquiries can be directed to the most appropriate source, whether it be an AI agent, workflow automation, or human representative.
Tom Eggemeier, CEO of Zendesk, who joined the company last fall, believes that as more customers interact with AI agents, the need for automated responses will continue to grow. “We believe that between 70% and 90% of interactions will be through AI agents in the future. And Ultimate has done a fantastic job at solving up to 80% of interactions with their AI agents,” stated Eggemeier in an interview with TechCrunch.
What sets Ultimate apart from other offerings in the market is their adaptive approach, where they utilize the appropriate level of technology to address each unique problem. “Sometimes it’s large language models, sometimes it’s old school machine learning and predictive analytics, and sometimes they’ll use a rule or workflow when a simple rule can complete a task, and there’s no need for large language models or predictive analytics,” explained Eggemeier.
While it may not come as a surprise, one of Ultimate’s integration partners is none other than Zendesk. However, Ultimate also works with other companies such as Salesforce and Freshdesk. Despite plans to incorporate Ultimate technology into the Zendesk platform, Eggemeier assures that they will still offer stand-alone products to other companies.
As for Ultimate itself, it’s a positive sign for customers and partners that Zendesk plans to maintain existing relationships instead of fully absorbing the startup into its own platform. Of course, with any acquisition, there may be uncertainty and time will tell the true impact on these relationships.
Zendesk made headlines in 2014 when it went public after raising over $85 million in funding. However, in 2022, the company faced activist investors and ultimately went private in a deal worth over $10 billion. Following this move, Eggemeier was brought on by a private equity firm to lead the company, replacing co-founder Mikkel Svane.
Founded in 2017 and having raised $27 million, according to Crunchbase, Ultimate’s main office will continue to operate in Berlin and will provide Zendesk a foothold in the city. Following the acquisition, approximately 140 employees will join Zendesk. Eggemeier anticipates a quick completion of the deal, potentially within 2-4 weeks.
