Ada to merge with Dialpad in deal reportedly valuing firm at $600 million

Toronto AI customer service company was worth $1.2 billion USD after closing Series C financing in 2021.

Toronto-based customer service technology company Ada has confirmed that it is merging with Dialpad, a US firm that also sells AI-powered software to businesses.

The news: Ada officially announced the deal on Wednesday in an X post and blog post. The company indicated that it is combining with California-based Dialpad “to create a new leader in agentic customer communications.” The transaction is expected to close on or around Nov. 12. According to The Globe and Mail, which first reported the merger on Tuesday, the all-share deal is set to value Ada at approximately $600 million CAD, a fraction of the $1.2 billion USD ($1.7 million CAD) Ada was worth when it closed its Series C financing in 2021 during the peak of the pandemic tech bubble.

From the source: Allen Lau, co-founder and former CEO of Wattpad, which was one of Ada’s first customers, and who was one of its first investors through his venture capital firm Two Small Fish Ventures, congratulated Ada’s team on the deal. “Building a startup is never a straight line,” Lau wrote in a post on X. “Mike, David, and the team navigated many challenges and built something of tremendous value.” BetaKit has reached out to both Ada and Dialpad for comment on the deal and its terms, which were not disclosed.

The context: Ada, which was founded in 2016 by co-founder and CEO Mike Murchison and former chief product architect David Hariri, got its start helping other companies set up their own customer service chatbots. Since then, the firm has reoriented to leverage large language models (LLMs) and AI agents while laying off staff. Dialpad, which has been around since 2011 and has also transformed to take advantage of recent AI advances, provides communications, contact centre, and sales engagement software to businesses. Murchison said joining forces with Dialpad will accelerate their joint product roadmap. Dialpad co-founder and CEO Craig Walker will lead the combined company, and Murchison will become chief AI officer.

Final thought: Ada is competing in the AI customer service space against better-funded players like Decagon and Sierra. While the quality of AI customer service has come a long way in recent years, surveys suggest many consumers would still prefer to speak to humans over bots. Many other Canadian tech firms that previously raised money at sky-high valuations are also now struggling to grow into them amid a rapidly shifting AI landscape. 

Source : Ada