Facebook acquires Kustomer for $1B in bid to expand its customer service capabilities

On November 30, Facebook announced its acquisition of Kustomer, a customer service platform and chatbot startup, in an effort to encourage companies to use its platforms to conduct business. Though the terms of the deal were not disclosed, sources close to the deal confirmed that it was for US$1 billion.

Kustomer, whose technology aggregates conversations from different social media platforms onto one screen, already has a relationship with Facebook, allowing companies to consolidate and respond to customer inquiries that are sent through Facebook Messenger. In October, Kustomer also began offering this service for Facebook’s Instagram messaging.

With an increasing segment of Facebook’s customers communicating with companies through messaging instead of calling, this acquisition appears to be a logical next step for Facebook. Currently, more than 175 million Facebook customers reach out to businesses every day using its WhatsApp messaging service. Coupling this customer engagement with Facebook’s latest venture, Shops, which lets businesses create online stores through Facebook and Instagram, acquiring Kustomer enables Facebook to implement effective customer service solutions for businesses across its multitude of platforms.

Author: Shadi Varkiani