SAN FRANCISCO, June 23 (Reuters) - Decagon, a startup

providing customer service solutions powered by artificial

intelligence, said on Monday it had raised $131 million in a

funding round that valued it at $1.5 billion.

The San Francisco company's Series C round was led by

venture capital firms Accel and Andreessen Horowitz, with

existing investors A*, Bain Capital Ventures and BOND

participating. Avra, Forerunner and Ribbit Capital also took

part in the round.

The fundraise comes less than a year after a Series B round,

when it raised $65 million at a $650 million valuation.

The funding establishes Decagon as one of the most highly

valued AI startups providing AI customer support solutions. Its

competitors include giants like Salesforce and startups

like Sierra, helmed by OpenAI board chairman and former

Salesforce co-CEO Bret Taylor.

In October, Sierra raised $175 million in a funding round

giving it a $4.5 billion valuation.

Since OpenAI's ChatGPT burst on the scene, investor interest

in funding AI technology has gradually shifted from expensive

foundation models to applications that generate steady revenue.

Decagon serves clients such as Hertz, Duolingo ( DUOL ),

Eventbrite ( EB ) and Chime. The company will use its

funding to grow the team and sell into more enterprises, its CEO

Jesse Zhang told Reuters.

Financial services company Chime saw a 60% reduction in

contact center costs from using Decagon and a doubling of its

net promoter score, a measure of customer satisfaction, Zhang

said.

"When AI can take action and solve things, customers can get

what they want much faster and more consistently," he said.

The company provides both text-based AI customer support

solutions like chat and email as well as AI voice agents that

are capable of end-to-end customer support calls.

Decagon's software tools also allow companies to create

their own AI customer support solutions, Zhang said.