Bret Taylor’s AI startup Sierra has surged to a $4.5 billion valuation, up from $1 billion earlier this year, with a fresh $175 million funding round led by Greenoaks Capital. This significant valuation increase comes as Sierra, co-founded by former Salesforce co-CEO Bret Taylor and former Google executive Clay Bavor, seeks to redefine customer service with advanced AI agents tailored to reflect each brand’s unique voice.
Taylor, who also chairs OpenAI’s board and previously helmed Twitter’s board during Elon Musk’s acquisition, brings extensive tech expertise to Sierra. He co-founded the company with Bavor, a long-time Google veteran who spearheaded the company’s virtual reality division and led Google Labs. Sierra’s objective is to bridge the gap in customer service across a broad range of industries. Current clients include household names such as ADT, Sonos, Weight Watchers, and Casper, which use Sierra’s AI to create customer service agents that align with their brand identity and enhance customer experience.
“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, adding that Sierra’s focus is not just on domestic expansion but also international markets.
Unlike conventional chatbots, which Taylor describes as “annoying” and “robotic,” Sierra is committed to creating conversational agents that feel empathetic and genuine. Taylor even banned the term “chatbot” from Sierra’s downtown San Francisco headquarters to emphasize the distinction. His goal is to offer clients conversational AI that can reflect brand values. “We really think that your conversational AI agent should be not only transactional but a brand ambassador,” Taylor explained. “It’s actually a statement of your values. Do you want to be sarcastic? Use emoji? Sound like text messaging, or more like a lawyer?”
This flexibility has led Sierra to create unique AI personas for each client. Chubbies, for example, introduced a playful, sarcastic agent named Duncan Smothers, while luxury brands often opt for a refined British accent to convey sophistication. The company’s “constellation” of models approach, with a “supervisor” model, is central to Sierra’s technology. Using large language models sourced from OpenAI, Anthropic, and Meta, Sierra combines one primary model for heavy-duty tasks with a secondary model to improve reliability and accuracy. This unique setup allows Sierra to meet the high standards of personalized customer service.
Sierra’s new funding round comes at a time when AI investment is surging across Silicon Valley. Competitors like Salesforce and Microsoft, which collaborates with OpenAI, are also pushing into the AI agent market. Taylor sees Sierra’s role as comparable to the companies that built cloud solutions atop platforms like AWS. “In the cloud era, you had Shopify, Salesforce, ServiceNow, and Adobe — I think the same thing will play out in AI with Sierra,” he said, positioning Sierra as a foundational platform for branded customer-facing AI agents.
This funding round follows a series of significant AI investments. OpenAI recently raised funds at a staggering $157 billion valuation, while Perplexity is reportedly raising capital at a valuation of around $9 billion. According to CB Insights, nearly one-third of venture capital this year has gone toward AI startups, underscoring the industry’s explosive growth.
“When a technology wave like this happens, I think a lot of people are trying to place their bets,” Taylor commented. “I don’t know which company will win, but it’s a smart investment, categorically. Customer experience and customer service represent a huge opportunity, and I think we’re the leader in this space, seeing a lot of demand as a result.”