Meta continues ‘year of efficiency’ by spinning out Kustomer

17 May 2023

Image: © MR/

Meta acquired Kustomer last year to integrate its customer service products, but the tech giant is working to become a ‘more nimble organisation’ this year.

Meta appears to be continuing its cost-cutting measures, as the company has spun out its customer services software start-up Kustomer.

The tech giant first took steps to acquire Kustomer in 2020 for a reported valuation of $1bn, but this deal was met with EU scrutiny and only got approved last year.

Now, Kustomer is back as an independent company and said its original partners have invested $60m to support the company’s growth. The company provides customer service products such as a customer relations management platform and an automated chatbot for businesses.

Speaking on the company’s plans, CEO and co-founder Brad Birnbaum said Kustomer will invest in “new talent and technologies to expand our product offerings”, before focusing on its automation services and “generative AI advancements”.

“We are confident in our vision to scale as an industry leader and we look forward to fully embracing our start-up superpowers to bring innovative customer service solutions to market faster than ever before,” Birnbaum said in a blog post.

Birnbaum said the journey with Meta was “amazing” and that the two companies are proud of what they accomplished together. It is unclear how much of a stake Meta still has in Kustomer.

“Our partnership has resulted in expanding our international offerings, broadening our capabilities with artificial intelligence and deepening our integration with Meta’s modern communication channels,” Birnbaum said.

Year of efficiency

Meta originally planned to integrate Kustomer’s products into its various services, but the tech giant has had some challenges over the past year.

The company’s focus on the metaverse has been eating into its profits, costing billions each quarter, while Meta saw its first ever revenue decline last July. This drop continued for three financial quarters and only turned around last month.

In February, Meta founder and CEO Mark Zuckerberg hailed 2023 as the “year of efficiency” and said the company would focus on becoming “a stronger and more nimble organisation”.

In March, Meta announced plans to cut 10,000 jobs across its organisation, in addition to the job cuts Meta announced in November that affected 11,000 employees.

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Leigh Mc Gowran is a journalist with Silicon Republic