Hightouch Hits $1.2 Billion Valuation as AI Agents Take Over Marketing

For years, marketers have chased the elusive promise of delivering the right message to the right customer at the right time. It’s a phrase that has been thrown around in boardrooms and conferences, but in practice, the reality has been a flood of irrelevant emails, misplaced ads, and marketing strategies that never quite hit the mark. Now, Hightouch, a startup founded by ex-Segment engineers, is making a strong case that AI, if used correctly, could finally turn that promise into something real.

The company just closed an $80 million Series C funding round, led by Sapphire Ventures, with participation from NVC, Amplify Ventures, ICONIQ Growth, Bain Capital Ventures, and Y Combinator. This investment doubles Hightouch’s valuation from its last round in 2023, pushing it to a hefty $1.2 billion post-money. But what stands out isn’t just the valuation—it’s why investors are willing to bet big on this company now.

Hightouch’s AI Decisioning product, launched in August 2024, is turning heads across marketing teams and C-suites. The AI-powered system automates personalization at a level that, until now, has required immense manual effort. Instead of marketers setting rigid rules and pre-planned customer journeys, Hightouch’s AI agents take on the work, running thousands of experiments to determine what works best for each individual. This shift has already started changing how companies approach customer engagement, and it’s the driving force behind this latest funding round.

From Segment to Hightouch

To understand what makes Hightouch different, it helps to go back to its origins. Co-CEOs Tejas Manohar and Kashish Gupta, along with CTO Josh Curl, started the company in 2019 after recognizing a major problem at Segment, where Manohar and Curl worked together. Segment had made it easier to integrate customer data using APIs, but that approach still required companies to bring data into Segment in the first place—something that wasn’t always feasible.

“Asking customers to get data into Segment was an onerous task,” Manohar recalled. Data warehouses, which were becoming the primary storage for massive amounts of customer data, were mostly used for analytics, not for marketing. That disconnect meant marketing and sales teams were always one step behind, working with data that wasn’t easily actionable.

So in 2019, as Segment scaled toward its eventual $3.2 billion acquisition by Twilio, Manohar and Curl left to start Hightouch, teaming up with Gupta, a machine learning expert. The company’s initial focus was on enabling businesses to activate customer data directly from warehouses, eliminating the need for separate Customer Data Platforms (CDPs) that duplicated data and slowed down decision-making.

Hightouch launched its first product, a Composable CDP, in 2020, and it took off quickly. The idea was simple: instead of relying on traditional CDPs like Adobe and Salesforce, businesses could pull data straight from their cloud warehouses and use it in real-time across sales, marketing, and customer service tools. The approach reduced costs, ensured compliance with regulations like GDPR and CCPA, and, most importantly, gave businesses faster, more accurate data.

The AI Decisioning Bet and Why It’s Paying Off

Fast forward to 2024, and Hightouch’s bet on AI is proving to be its biggest move yet. AI Decisioning doesn’t just help marketers use AI to generate copy; it acts as an intelligence layer that decides which messages to send, when to send them, and through which channels. It operates on reinforcement learning (RL), analyzing past customer behavior to predict the most effective strategies for maximizing engagement and lifetime value.

This isn’t about simple automation. AI Decisioning can be given a goal such as driving repeat purchases or increasing app downloads and then autonomously determines the best path to achieve it. It tests different combinations of content, timing, and channels, constantly learning and improving. The result is a system that doesn’t just execute marketing strategies; it creates them.

For existing customers, this new product was rolled out as an extension of Hightouch’s CDP. Adoption was rapid, with major brands like Spotify, PetSmart, Tripadvisor, Grammarly, and Cars.com already leveraging the AI to improve customer engagement. Gupta admitted that rolling it out to their current customer base helped accelerate adoption, but it wasn’t just existing clients showing interest, new business started rolling in because of AI Decisioning’s capabilities.

“That’s what motivated us to say, ‘All right, let’s have this conversation, and let’s raise the round,’” Gupta said. “Because now we finally have a good use for capital.”

Why Investors Are Betting on Hightouch

Sapphire Ventures’ Rajeev Dham, who is joining Hightouch’s board, sees AI Decisioning as a major shift in how marketing works. “Open up your phone right now. Do you think the marketing you’re receiving is as good as it could be?” Dham said. “With AI Decisioning, Hightouch has the bold vision and technical know-how to fix both the marketer and customer experience problem once and for all.”

Manohar echoed the sentiment, pointing out that most AI in marketing today still relies on manual processes. “We’ve talked about 1:1 personalization for years, but it’s not possible with the way marketers work today,” he said. “Everything is too slow, too manual, and usually results in customers receiving a blizzard of irrelevant communications.”

Gupta added that marketers aren’t just looking for another tool to help them execute existing strategies. They need something that changes how marketing is done at a fundamental level. “The top use case we’re seeing is driving loyalty and frequency,” Gupta said. “It’s harder than ever to drive relevance, and we believe agentic AI is a solution.”

Curl, the company’s CTO, emphasized that Hightouch’s approach isn’t just about replacing marketers with AI, it’s about giving them better tools. “Our platform combines multiple ML models to decide the best message, channel, and timing for each customer,” he said. “We automatically run high-scale experiments to learn what works best for each consumer, and we’re quickly adding support for more channels like offers, promotions, web, and app experiences.”

The AI-driven marketing space is heating up, and Hightouch isn’t without competition. In the CDP market, it goes up against giants like Adobe, Salesforce, and Segment. In ad tech, it faces players like LiveRamp. And in the AI-driven personalization space, OfferFit, Movable Ink, and Aampe are emerging as potential rivals.

With the new funding, Hightouch plans to expand AI Decisioning’s capabilities, refining its models, adding more flexibility for marketers, and increasing the number of supported channels. The company is also hiring aggressively to support its growing customer base.

For marketers, it’s a future where AI handles the complexity of personalization, freeing them to focus on strategy and creativity. For consumers, it means fewer spam emails and irrelevant ads, and more interactions that actually make sense.