Ada Merges With Dialpad in Deal Reflecting Shifting AI Valuations
AI-generated image · Bay Street Wire
The Toronto-based customer service AI firm will combine with California's Dialpad, with reporting suggesting a valuation significantly lower than its 2021 peak.
Toronto-based customer service technology 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 announcement, made via a blog post and X on Wednesday, indicates the transaction is expected to close around Nov. 12.
According to reporting from The Globe and Mail, the all-share transaction values Ada at approximately $600 million CAD. This figure represents a sharp decline from the $1.2 billion USD ($1.7 billion CAD) valuation the company held during its Series C financing 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 initially focused on helping companies implement customer service chatbots. The company has since pivoted toward AI agents and large language models (LLMs), a transition accompanied by staff layoffs. Dialpad, founded in 2011, offers sales engagement, contact centre, and communications software to business clients and has similarly evolved to integrate recent AI advancements.
Murchison stated that the merger will accelerate the combined entity's product roadmap. Following the deal, Dialpad co-founder and CEO Craig Walker will lead the combined company, while Murchison will transition into the role of chief AI officer.
Allen Lau, co-founder and former CEO of Wattpad and an early investor in Ada via Two Small Fish Ventures, congratulated the team on X, noting that building a startup is not a straight line and praising Murchison and Hariri for building something of value.
Ada enters this merger while competing in the AI customer service sector against rivals such as Sierra and Decagon. BetaKit notes that many Canadian tech firms that secured high valuations in previous years are currently struggling to scale within a rapidly changing AI landscape, while consumer surveys indicate a continued preference for human interaction over bots.
Both Ada and Dialpad have not disclosed the specific terms of the deal to BetaKit.