Facebook Buys Customer Service Software Firm Kustomer

Facebook acquired Kustomer, a New York-based software company that helps companies manage customer conversations from multiple services in a single dashboard.

The social media giant reached an agreement to support efforts to monetize its messaging business, which is expanding to include customer service products. They help companies interact with people through chat apps, such as WhatsApp and Messenger.

Facebook executives stated that messaging and texting have become as important as a phone call and businesses must adapt. Kustomer offers automated tools for companies to handle customer requests with bots.

Facebook has made customer service a fundamental part of its business strategy on WhatsApp, the world’s most popular messaging service. It has signed deals with trade-related companies in India and Indonesia. Besides, the company is working on a payments function to launch in key markets like Brazil. The company hopes that businesses will one day use WhatsApp as their de facto website. It will allow customers to browse their product catalogs, make purchases, and interact directly with companies to meet their in-app customer service needs.

It is still unclear whether regulators will approve the acquisition

WhatsApp currently makes money by charging large companies to send messages to customers in the app instead of via email. Some customer service platforms, like Kustomer, use WhatsApp software to allow companies to manage these interactions in a single interface. Facebook executives said Kustomer would continue to operate the business as usual while the acquisition goes through a regulatory review.

It is unclear whether regulators will approve the deal. Facebook is already under antitrust scrutiny for previous acquisitions, including its purchase of WhatsApp in 2014. According to the chief operating officer from WhatsApp, Matt Idema, competing customer service companies will be able to offer corporate WhatsApp messages. Even though Facebook will now own one of those tools. 

Idema said that this is a great space. It is adding a tool for a specific segment, but they want to continue enabling the entire market. Kustomer, which has more than 200 employees, performs better with companies that need 20 to 100 customer service agents, Idema added.

Facebook did not reveal the terms of the acquisition. But the Wall Street Journal reported Monday that the deal could value Kustomer. It is not publicly traded, at more than $1 billion. 

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