Bret Taylor’s Sierra raises nearly $1B in latest AI capital push

Artificial intelligence startup Sierra is raising nearly a billion dollars in a new funding round, CNBC has learned, as venture capital investors search for winners in an ongoing deal spree.

The San Francisco-based company brought in $950 million in fresh capital at a $15.8 post-money valuation, led by Tiger Global and Google’s GV. Benchmark, Sequoia, Greenoaks and other existing investors also participated.

The startup was founded three years ago by OpenAI chairman and former Salesforce co-CEO Bret Taylor, with former Google executive Clay Bavor. Taylor was also chief technology officer at Facebook, and chairman of Twitter when Elon Musk bought the social media network. The Sierra founders met at Google, where Taylor was largely credited with helping create Google Maps and Bavor led virtual reality efforts and Google Labs.

Sierra sells AI customer service agents and is positioning itself as a leader in a new class of software companies built on top of foundational models from OpenAI and Anthropic. According to Taylor, the company leverages a “constellation of models” alongside its own fine-tuned proprietary layers.

Sierra topped $150 million in annual recurring revenue, or ARR, in eight quarters, according to the company. That growth timeline is unprecedented in traditional software and highlights “intense demand in the market,” Taylor said.

“There’s a really big addressable market and immediate opportunity,” Taylor said. “We’ve sort of digitized the last remaining analog channel, which is the telephone line — it’s a better experience. You don’t need to wait on hold. These agents are naturally multilingual.”

Taylor estimated that $400 billion is spent annually on customer service. A bulk of that, he said, is moving to AI agents.

Taylor described buzzy AI coding agent companies like Cursor and Replit as the largest area of the market, followed by customer service agents. The new cash injection is to maintain a lead in what’s an increasingly crowded space, he said.

“There’s just a lot of competition. We are multiples larger than the next biggest and are trying to invest aggressively so that we can continue to expand our lead,” Taylor said.

Sierra’s customers are mostly enterprises like Prudential, Cigna, Blue Cross Blue Shield and Rocket Mortgage, as well as one in three of the world’s largest banks. The startup serves more than 40 percent of the Fortune 50, Taylor said.

Peter Fenton, general partner at Benchmark, was one of Sierra’s first investors and also…