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AnswerIQ co-founder Prashant Luthra; Madrona Venture Group Mangaing Director S. “Soma” Somasegar; and AnswerIQ co-founder Pradeep Rathinam. (Madrona Photo)

Freshworks has acquired AnswerIQ, a 3-year-old Seattle-area startup backed by Madrona Venture Group that sells AI-powered customer service software.

AnswerIQ co-founder and CEO Pradeep Rathinam.

San Mateo, Calif.-based Freshworks also sells customer service products, and the acquisition will complement its existing platform. Freshworks was valued at $3.5 billion after raising a $150 million investment round in November.

“The integration of AnsweriQ’s technology enhances our AI/ML capability in the customer engagement space and offers significant value to our customers,” Freshworks founder and CEO Girish Mathrubootham said in a statement.

AnswerIQ CEO Pradeep Rathinam told GeekWire that the startup began fundraising last year when an “incredible opportunity” arose with Freshworks.

“Freshworks is growing at a phenomenal pace and looking to target larger enterprises,” he said. “Our AI tech is ideally suited for a large volume of cases/tickets. The promise of taking our AI and offering it as a part of a platform to thousands of customers was very appealing.”

AnswerIQ helps companies including 2K Games, Freshly and SeatGeek automate customer service requests such as cancelled orders or other various issues.

The startup raised a $5 million Series A round from Seattle-based Madrona in 2017, when it was known as SmartAssist. The company’s technology originally spun out of GE.

Rathinam is a 17-year veteran of Microsoft and ex-CEO of Aditi Technologies. He co-founded AnswerIQ with Prashant Luthra, who was previously an executive at Intelius and TalentWise.

The company’s board included S. “Soma” Somasegar, managing director at Madrona, and Amit Mital, CEO at Seattle startup studio Kernel Labs.

Both co-founders will join Freshworks — Rathinam as its chief customer officer, and Luthra as its vice president of engineering. AnswerIQ employed less than 20 people; all will join Freshworks. The startup will continue to support its existing customers and will release future products under the brand FreshiQ.

“We are 100 percent aligned with Girish’s vision of bots and humans working together, where business should be able to gracefully handoff cases from bot to human (agent) so that the experience is seamless for the end customer,” Rathinam said.

Freshworks has more than 150,000 customers and more than 2,700 employees across 13 offices. It will now have a Seattle outpost after the acquisition of AnswerIQ.

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