A self-sustaining company Power grows through new capital and acquisitions

David Karandish has been busy.

Capacity, his auto-backing company, was planning a $5 million “bridge round” to help the company break even. But TVC Capital, Toloka.vc, and other venture backers had something bigger in mind. So they threw in another $21 million in what became Capacity’s $26 million Series D round.

While all this was happening, Capacity acquired three companies: business search firm Lucy (which had raised $5.6 million) and two startups focused on customer service, Linc and Envision.

“It’s an exciting time of change at Capacity as we expand to help brands do more to automate interactions with customers and team members,” Karandish told TechCrunch. “We’re at a turning point in AI and more businesses are realizing that they need a complete platform to succeed, rather than a bunch of point solutions.”

Karandish founded Capacity with Chris Sims in 2017 as part of Equity.com’s incubator program. After a $900 million exit from Answers.com (which Karandish also founded), Karandish says he wanted to start a business to address what he saw as the biggest barriers to customer service.

“Rising costs have put pressure on support teams to do more with less,” Karandish said. “At the same time, consumer expectations are changing rapidly as consumers both want to help themselves but are increasingly frustrated by the lack of supplies. Our goal with Capacity is to provide a great customer experience while recognizing that stepping up to the plate is the right thing to do in most situations.”

Power connects to the company’s technology stack to answer questions and automate support tasks. The platform pulls information from files, apps like Gmail, customer relationship management software, and more to build a knowledge base that Capacity’s chatbot and help desk tools can draw on.

Employees can ask Capacity Chatbot questions like “What was added to the integration contract yesterday?,” or even instruct it to do things like update the status of a sales lead. A chatbot and help desk can deliver company-wide announcements, such as news and event notifications. And they can be done externally (with filters to hide sensitive data, mind you), embedded on a company’s website to answer common customer questions.

“We look at Capacity as the ease of use of a Zendesk-like tool with the automation chops of ServiceNow,” Karandish said. “From our perspective, we’re using a playbook very similar to Parker Conrad’s ‘combination model’ – except for us, we’re focused on support.”

Innovations in self-service software – including AI – are making them a more attractive solution for companies than ever before. For example, Cleverly.ai – which was acquired by Zendesk in August 2022 – finds answers to customer questions by building an information layer on top of applications. Meanwhile, Directly taps algorithms trained by subject matter experts to respond in a meaningful way to customer issues across various messaging channels.

Customers love self-service options. According to a Zendesk survey, 67% prefer them over customer service and support. But it can be difficult to fix them. A Gartner survey found that, on average, only 14% of customer service and support issues are fully resolved in self-help.

Power will enhance and expand its product portfolio with its latest acquisition.

Karandish sees the offering of Lucy, which imports and analyzes data from business applications and systems, augmenting Capacity’s existing targeting technology. Visualization, will help Ekhona customers to flag unresolved conversations and calls and train human agents. And Linc will bring self-service marketing and e-commerce tools to Capacity, Karandish said.

The plan is for Lucy’s founders, Dan Mallin, Scott Litman, and Marc Dispensa, to join Ability to help lead products and team integration. Envision CEO Rodney Kuhn will oversee capacity’s contact center solutions, while Linc founder and CEO Fang Cheng will lead Capacity’s e-commerce efforts.

So far, Capacity has been achieved eight companies – the other five being Textel, LumenVox, Denim Social, SmartAction, and Cereproc – and raised more than $89 million.

Karandish said the new division will increase the number of people to 200 by the end of the year as the Saint Louis-based company “looks towards profitability.” Capacity’s customer base now stands at more than 2,500 products, he added, with annual recurring revenue of nearly $50 million.

“Our growth strategy reflects what our customers are asking for: an all-in-one AI platform that delivers across all communication channels,” he added. “We’ve identified 24 customer experience steps that are perfect for automated support … Each acquisition adds specific expertise and talent to help Ability become a leading provider of AI solutions for customer and employee experiences.”