Sierra, a San Francisco startup that has been operating for 21 months and specializes in developing AI-powered customer service agents for large organizations, revealed on Friday that its annual recurring revenue (ARR) has reached $100 million. This impressive pace of expansion indicates that companies from various sectors are increasingly adopting AI-driven agents.
Even the company’s experienced founders, Bret Taylor, former co-CEO of Salesforce, and Clay Bavor, a longtime Google executive, were taken aback by the speed of Sierra’s progress. In a blog post, they remarked, “This happened much faster than we had anticipated.”
Sierra’s client list features technology firms such as Deliveroo, Discord, Ramp, Rivian, SoFi, and Tubi, as well as established names outside the tech industry, including ADT, Bissell, Vans, Cigna, and SiriusXM.
Taylor and Bavor anticipated that tech companies would be open to piloting AI customer service agents, but they were surprised to see traditional businesses also signing on as Sierra clients.
According to the company, its AI agents are capable of tasks like verifying patient identities for healthcare organizations, managing product returns, issuing replacement credit cards, and assisting with mortgage applications — automating customer support functions that previously needed human intervention.
While Sierra competes with other startups such as Decagon and Intercom, it asserts that it currently leads the AI customer service market.
The company’s most recent valuation was $10 billion, following a $350 million funding round led by Greenoaks Capital in September. Other backers include Sequoia, Benchmark, ICONIQ, and Thrive Capital.
With $100 million in ARR, Sierra’s valuation stands at 100 times its revenue, a lofty figure even considering its remarkable growth rate.
Sierra utilizes a pricing approach based on outcomes, billing clients for completed tasks instead of charging a standard subscription fee.
Taylor and Bavor’s professional relationship began at Google in 2005, when Taylor brought Bavor on board as an associate product manager.
Taylor, who graduated in computer science from Stanford, was a co-creator of Google Maps before launching FriendFeed, which was later acquired by Facebook. At Facebook, he served as CTO and played a key role in developing the famous “Like” button. He also founded Quip, a competitor to Google Docs, which Salesforce purchased for $750 million in 2016.
Taylor later became co-CEO of Salesforce, working alongside Marc Benioff for more than a year. After his departure from Salesforce in 2023, Bavor — who had spent 18 years at Google overseeing products like Gmail and Google Drive — invited Taylor to lunch, where they decided to start Sierra together.
