Exclusive: Zendesk debuts formal VC arm to back early-stage AI startups
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Zendesk has set up a venture arm to invest in early-stage AI startups.
Why it matters: The customer support software company is joining the growing number of B2B tech firms looking to stay on top of the latest AI trends and grow their own business ecosystem by backing startups.
Zoom in: Zendesk—which was taken private in 2022 by Hellman & Friedman, Permira and others—plans to dedicate "tens of millions of dollars" to its venture efforts from its balance sheet, CEO Tom Eggemeier tells Axios.
- Focusing on seed and some Series A rounds, Zendesk will invest anywhere from half a million dollars to millions per deal.
- It's looking for companies that are working on customer service or a related area, are focused on AI, are or are willing to integrate into its partner marketplace, and are doing less than $50 million in ARR.
- It's already invested in PolyAI, a voice-based customer service system provider, and unitQ, a customer feedback collection and analytics startup, as part of its new formal investment arm.
The big picture: AI in the enterprise customer service world is one of the few bright spots in the industry's current trough of disillusionment.
Between the lines: "It's not as much about the returns, it's more about putting people into the ecosystem," explains Eggemeier.
- Among the company's goals for its venture arm: learn from the startups, grow its marketplace of app and partner integrations, help grow the broader AI industry, and find potential acquisition targets.
- It previously made on-off venture investments starting in 2018, but is now formalizing its efforts.
The bottom line: Eggemeier predicts that Zendesk Ventures' AI focus will remain for the foreseeable future given the company's own view that AI will deeply shape customer service in the long run.
