Bret Taylor’s AI startup Sierra secures $175 million at a $4.5 billion valuation

Sierra, a customer service AI startup led by former Salesforce co-CEO Bret Taylor, has just secured $175 million in new funding from Greenoaks Capital, quadrupling its valuation to a remarkable $4.5 billion. This funding comes shortly after its January fundraise, which pegged Sierra at $1 billion, making this one of Silicon Valley’s most talked-about ventures.

This funding boost highlights the strong interest Sierra has stirred since its public launch less than a year ago, particularly as one of the standout startups in Silicon Valley. Greenoaks Capital led this latest round, joined by Josh Kushner’s Thrive Capital and Iconiq, underscoring the momentum Sierra has gained in AI.

This latest round follows Sierra’s initial $110 million raise led by Sequoia and Benchmark, which had initially valued the company at close to $1 billion. Notably, Taylor, who chairs OpenAI’s board and was once chairman of Twitter during Elon Musk’s takeover discussions, is no stranger to big tech moves. His co-founder, Clay Bavor, brings nearly two decades of experience from Google, where he led Google Labs and advanced VR initiatives.

Taylor, known for his deep roots in the tech industry, co-founded Sierra with former Google executive Clay Bavor, whom he met while they were both at Google. Bavor, who led Google’s VR efforts and Google Labs, brings nearly two decades of experience to the table, adding to Sierra’s impressive pedigree. Taylor, who is also the chairman of OpenAI’s board, has a storied history, including his pivotal role in developing Google Maps and serving as chairman of Twitter’s board during Elon Musk’s acquisition.

This funding push has firmly positioned Sierra as one of the most highly valued young AI companies. The buzz around Sierra highlights the sustained investor interest in AI applications that generate steady revenue—moving beyond large foundational models toward enterprise-ready tools. Sierra, less than a year into its public launch, has already notched over $20 million in annualized revenue, Reuters reported, citing sources familiar with the numbers.

The startup stands out in the competitive AI-powered customer service sector by tackling common challenges, such as minimizing the “hallucinations” of language models—instances where AI generates inaccurate information. Sierra says its approach enhances trust, allowing brands to use its conversational AI tools confidently in real customer interactions. Currently, it counts ADT, WeightWatchers, and SiriusXM among its clients.

The spotlight on enterprise applications in AI, like those offered by Sierra, has grown significantly, especially since OpenAI’s ChatGPT took the world by storm. Sierra’s offering brings a polished conversational style that steers away from the “chatbot” label, aiming for a more human interaction model. Taylor has even banned the word “chatbot” from Sierra’s offices, emphasizing the company’s dedication to crafting smoother, more intuitive experiences than those typically associated with automated customer service bots.

“We think every company in the world, whether it’s a technology company or a 150-year-old company like ADT, can benefit from AI, and the technology is ready right now,” Taylor told CNBC in an interview. “We want to enable Sierra to address that market, and that means expanding internationally and to other industries.”

Taylor calls Sierra “conversational AI” and has outright banned the term “chatbot” in the company’s San Francisco office. He’s set on creating a style of interaction that feels natural and engaging, contrasting the smooth ease of OpenAI’s ChatGPT with the often clunky, frustrating experience of navigating an airline’s automated phone system.

The next chapter for Sierra will focus on bringing this refined “empathetic and conversational” AI to more clients and markets worldwide. Taylor’s vision and Bavor’s expertise position Sierra as a compelling new player in enterprise AI, with plenty of investors eager to support its growth.