How A $140M Funding Round Positions Manychat For The Future Of Conversational Commerce

Photo Courtesy of Mike Yan

Nearly a third of consumers prefer brands to send post-purchase follow-up messages via social media, according to eMarketer. As US retail social commerce sales jumped 26% in 2024, one company has positioned itself at the center of the convergence between social messaging, AI automation, and commerce.

Having just closed its $140 million Series B funding round, Manychat is tuning into a market that’s reshaping how brands engage with customers. With 82% of organizations planning to integrate AI agents within three years and 60% of Gen Z interested in AI-assisted shopping, the timing works well for a platform that processes billions of automated interactions across social media platforms.

The shift toward conversational commerce is becoming fundamental to how younger consumers expect to interact with brands. As Instagram’s CEO Adam Mosseri stated, “send rates” – how often content is shared via DMs – are now more important than likes, comments, or watch time for expanding organic reach. This algorithmic shift makes DM automation tools increasingly valuable, especially as 86% of US marketers are using influencer marketing in 2025. 

The Psychological Roots of an AI Visionary

Before starting a company that now processes billions of automated interactions, Manychat founder Mike Yan studied psychology. Yan was fascinated by human relationships and that background turned out to be prescient when using AI to have conversations in his business. In 2015 Yan automated Telegram chats, which led way to the idea that later became Manychat — a chatbot platform that enables creators and businesses to automate conversations over social and messaging apps.

The company took off when Facebook Messager opened its APIs in 2016, providing access to a billion users. At the time, Yan and his co-founder were focused on messenger marketing at an enormous scale, well-positioned as the wave of conversational commerce began reshaping nearly all of retail.

The Evolution Toward Agentic AI

The company serves clients ranging from Nike and the NBA to The New York Times, plus over a million smaller businesses across 170 countries. But Yan’s bold vision extends beyond current capabilities toward what he calls “agentic AI.”

“We believe there is a lot of opportunity for app layer players like Manychat, who may not work on their foundational models but have a deep understanding and insight into specific customer segments and use cases,” Yan says. “They can productize the existing foundational models and create an end-to-end user experience that elevates the value of these models.”

This approach reflects the AI landscape’s evolution from narrow applications through generative AI and reasoning models to autonomous, multi-step task completion. Manychat AI, launched last year, aims to enhance social platform interactions by providing more personalized, interactive chat experiences that drive both conversions and customer satisfaction.

“Our goal with Manychat is to build an agent for social interactions that assists creators and businesses in building great relationships at scale without losing authenticity,” Yan notes. “Balancing automation with manual contact and the human touch is a complex challenge, both technically and from an experience standpoint. While there is much work to be done, the opportunity is tremendous.”

Competitive Landscape And Market Position

There are a number of public companies operating in marketing automation spaces. Salesforce CRM offers Service Cloud with AI-powered chatbots; HubSpot HUBS has marketing automation that includes some social messaging features; Microsoft MSFT includes conversational AI as part of Azure and Dynamics 365; Adobe ADBE offers marketing automation capabilities as part of Experience Cloud.

But none focus on automating social media DMs specifically at the scale and specialization opportunities that Manychat has developed. This positioning will become more valuable as markets for automation continue to mature, especially as specialization increases competitive advantage. 

Manychat’s community-building emphasizes this. The yearly Instagram Summit that sold more than 15,000 tickets with speakers such as Trevor Noah and executives at Meta illustrates the company’s role in shaping the industry’s dialogue around social commerce.

The Road Ahead

While Yan is not disclosing any specific IPO plans, the company’s conservative financial approach indicates that they are focused on sustainable, profitable growth over rapid expansion. The market conditions favor this approach: 74% of companies are already experiencing ROI in at least one generative AI use case, and about half of B2B marketers believe the use of AI reduces routine tasks and increases overall workflow efficiency.

The challenge ahead is what Yan calls maintaining authenticity while being able to automate at scale — a significant technical and experiential problem that will require more nuanced solutions. As enterprise AI investments grow and social commerce continues to experience explosive growth, Manychat’s success at solving this challenge may define whether brand-consumer connections of the future will be set through intelligent automation, human authenticity, or a combination of the two.

For investors tracking the trifecta of AI, social media, and commerce, Manychat offers a compelling case study in how niche AI applications can create value in rapidly evolving markets, driven by Yan’s powerful vision. With data pointing to continued acceleration in social messaging, AI adoption, and conversational commerce, the $140 million funding round positions Manychat to harness several high-growth trends at once.