Turning Customer Conversations Into a Revenue Engine, Lace AI Raises $14M

Long before Boris Valkov helped build SaaS software to detect lost revenue opportunities, his journey began in his family’s grocery store, where he was answering phone calls. At that time, he was just a kid learning how much a single phone call could matter and how tone, timing, and trust could make or break a sale. This experience stuck with him. 

When he became an AI engineer, working for companies like VMware and Meta, he started to look for ways to combine AI with personal touches. At Meta, Valkov helped build PyTorch, the machine learning library now powering everything from self-driving cars to large language models. But even amid the evolution of generative AI and foundation models, something didn’t sit right with him. He realised that there is a massive gap in the industry. Although AI is getting better at simulating intelligence, most businesses still struggle with basics, like what happens when a customer picks up the phone.

From Meta to Missed Revenue

With an aim to combine AI with customer service, Boris left Meta and teamed up with fellow engineer Stanislav Stoyanov in 2021. The pair set out to find a use case where AI could have a real and tangible impact on businesses and help them generate additional revenue. They spoke with over 100 businesses across industries, trying to understand where revenue was leaking. 

That’s when they discovered that in sectors like HVAC, plumbing, and roofing, companies often had little visibility into how many potential customers they were losing simply because a call went unanswered, mishandled, or forgotten. This insight led to the start of Lace AI, an AI-powered platform designed to turn those overlooked conversations into revenue-generating assets.

Today, Lace AI raised $14 million in a seed round led by Bek Ventures, bringing its total funding to $19 million.

What Lace AI Actually Does

Lace AI’s pitch is simple and powerful. It listens to all the inbound calls, analyzes them with AI, and tells businesses exactly where they’re leaving money on the table. Their model is straightforward SaaS with a monthly subscription based on the number of agents or customer support representatives using the platform.

The product gives businesses real-time visibility into performance, like how many calls were mishandled, how much potential revenue was lost, and what could’ve gone better. The software then delivers feedback and coaching to help companies improve their future calls. And in a business where even a 1% increase in booking rate can translate into millions in extra revenue, the software is working as a relentless performance booster.

PipeDreams, a customer of Lace AI, was struggling to effectively evaluate productivity at scale with 25 customer service representatives (CSRs) handling up to 18,000 calls each month. Factors such as spam calls and unqualified customer service requests made it challenging for PipeDreams to determine whether poor performance was due to the quality of the calls or the effectiveness of the CSRs. However, after just one month of using Lace AI, PipeDreams experienced a 23% increase in its qualified booking rate. With access to Lace’s performance matrix, some CSRs saw their booking rates rise by nearly 50%. Additionally, the company achieved a 5.5-fold increase in QA cost savings.

“We see revenue as more than numbers. Every dollar we help generate is a vote of confidence from their customers, helping not just our clients grow but positively impacting millions of people they serve,” mentioned Boris.

A Big Step Forward with $14 Million in Seed Funding

After starting sales at the end of 2023, the company scaled rapidly, working with over 100 businesses, such as A1 Garage Door Service, Sage Home, Eco Plumbers, Matrix, and Lee’s Air. By 2024, it had grown annual recurring revenue (ARR) by a staggering 1,000%. Along the way, Lace AI also raised an unannounced $5 million as pre-seed led by Canvas Ventures.

With the new $14 million funding, Boris and Stan are focusing on expanding the platform’s capabilities and reach. They plan to introduce new features like real-time coaching during calls, deeper insights into conversion metrics, and broader integrations with CRM and contact center tools. Lace AI is also planning to triple its team of 20 people. The goal is to make Lace AI an essential tool for any business that depends on phone-based customer interactions.