Deepgram Raises $130M at $1.3B Valuation and Acquires a YC-Backed AI Startup

The growing adoption of voice AI across sales, marketing, customer support, and consumer applications has driven strong demand for speech-focused AI models, attracting significant investor interest. Riding this momentum, Deepgram announced that it has raised $130 million in a Series C funding round led by AVP, valuing the company at $1.3 billion.

The round included participation from existing investors Alkeon Capital, In-Q-Tel, Madrona, Tiger Global, Wing Venture Capital, and Y Combinator. New investors joining the round include Alumni Ventures, Columbia University, Princeville Capital, Twilio, and SAP. With this raise, Deepgram has secured more than $215 million in total funding to date.

Deepgram’s funding follows a broader trend of significant investments in voice AI companies over the past year, including Sesame’s $250 million Series B, ElevenLabs’ $180 million Series C, and Gradium’s $70 million seed round.

Elizabeth de Saint-Aignan, a partner at AVP, said the firm became interested in the space after repeatedly hearing enterprises discuss voice AI use cases. She told TechCrunch that as AVP spoke with companies about AI adoption, voice technology consistently emerged in areas such as contact centres and sales development.

“In 2024, when we were talking to enterprises about how they were thinking about using AI inside their business, we started to hear about them using voice AI in processes like contact centers and sales development,” de Saint-Aignan said. “When we looked more closely, we realized much of that technology was powered by Deepgram, which led us to the company.”

She added that voice AI has the potential to improve customer experiences while lowering operational costs, positioning Deepgram as a key infrastructure provider in the space.

Deepgram offers a suite of text-to-speech and speech-to-text models, along with platforms and APIs designed for conversational speech recognition, interruption handling, and low-latency performance. The company says more than 1,300 organizations use its technology, including meeting notetaker Granola, voice agent startup Vapi, and Twilio.

Deepgram CEO Scott Stephenson said the company was cash-flow positive last year and did not actively seek new funding.

“In the last year, voice AI has gone mainstream, and there is more potential pull,” Stephenson said. “We see an opportunity to make larger investments sooner to accelerate growth, which made this a good time to raise. We weren’t out looking for funding, but strategic investors who understand voice AI approached us.”

The company plans to use the new capital to expand globally, improve multilingual support, and deepen its focus on restaurant use cases. As part of this strategy, Deepgram has acquired OfOne, a Y Combinator-backed company that builds voice AI solutions for quick-service restaurants. OfOne claims its system achieves over 93% accuracy in order-taking.

Voice AI adoption in restaurants has faced challenges. In 2024, Taco Bell discontinued a voice AI pilot after a customer reportedly placed an order for 18,000 cups of water. Despite such setbacks, Stephenson remains optimistic.

“I’m excited about voice AI-driven food ordering because it could be the first positive interaction hundreds of millions of Americans have with voice AI,” he said. “If people can order food naturally through conversation, they’ll feel the technology is finally ready.”

Investor interest in restaurant-focused voice AI remains strong. OfOne’s acquisition follows Presto securing $10 million in new funding after signing clients such as Carl’s Jr.

Analyst reports estimate the global voice AI market is growing at more than 30% annually and could reach $14 billion to $20 billion by 2030. At that pace, voice model and API providers are expected to become multibillion-dollar businesses as they form a core layer of enterprise and startup AI infrastructure.