Ada Merges With Dialpad in a Valuation Reset for Toronto AI
AI-generated image · Bay Street Wire
The all-share deal valuing Ada at $600 million CAD marks a significant drop from its 2021 peak, signaling a shift away from the pandemic-era valuation bubble.
Toronto-based customer service AI firm Ada has confirmed, as BetaKit reports, that it is merging with California-based Dialpad to establish a new leader in agentic customer communications. The deal, announced by Ada via a blog post and X on Wednesday, is expected to close on or around Nov. 12.
Reporting from The Globe and Mail indicates the transaction is an all-share deal that values Ada at approximately $600 million CAD. This figure represents a steep decline from the company's valuation of $1.2 billion USD (roughly $1.7 billion CAD) recorded during its Series C financing round in 2021, a period BetaKit describes as the peak of the pandemic tech bubble.
Founded in 2016 by CEO Mike Murchison and former chief product architect David Hariri, Ada began by assisting companies with customer service chatbots. In recent years, the company has pivoted to utilize AI agents and large language models (LLMs), a transition that coincided with staff layoffs. Dialpad, founded in 2011, offers sales engagement, contact center, and communications software for businesses and has similarly evolved to incorporate AI advances.
Under the terms of the merger, Dialpad co-founder and CEO Craig Walker will lead the combined entity, while Murchison will transition into the role of chief AI officer. Murchison stated that the merger is intended to accelerate the joint product roadmap for the two firms.
Allen Lau, co-founder and former CEO of Wattpad and an early investor in Ada via Two Small Fish Ventures, praised the team's resilience on X, noting that building a startup is not a straight line and that Murchison, Hariri, and their team built something of significant value.
Ada enters this merger while facing competition from better-funded AI customer service rivals, including Sierra and Decagon. BetaKit notes that many other Canadian technology companies that secured high valuations in previous years are currently struggling to scale into those figures as the AI landscape continues to shift rapidly.