InQ raises $7.75M for e-commerce live chat service

Ever gone online to make a big-dollar purchase — a phone, a computer for example — and gotten almost to the end, but then aborted because you still had questions?

We’ve been there. Often, we end up calling a live customer service person, to double-check things like the length of warranty, the credit plan, or number of free minutes.

InQ, a Los Angeles company, detects when a customer has neared the end of the shopping process, and pops up a screen and offers to engage the customer in live chat. The customer service person also picks up the phone, if requested, to answer the customer’s last-minute questions. InQ claims to have increased sales 25 percent for big customers like Sprint and Bellsouth. Really? “It’s mind-boggling,” says Jason Green, venture capitalist at Emergence Capital, “I didn’t believe it myself.”

Tomorrow, inQ will announce it has raised $7.75 million a third round of funding, led by Green of Emergence Capital, and Partech International. Existing backers, Dolphin Equity Partners and Hudson Ventures also participated.

The company says the e-commerce shopping cart abandonment rate is about 40 percent. That gives it a strong market, even if the real number is half that.

InQ only gets paid if customers use it. It serves clients with high-priced goods, though, so typically gets paid between $25 and $100 per deal it closes.

Emergence’s Green said it inQ is better than competing service LivePerson. Live Person, he says, forces companies to use their own employees to conduct the chat or calls, but they may not have the training to do that. inQ’s chats are all conducted by inQ’s representatives, 55 of them sitting in Los Angeles.

Notably, inQ reports that half of shoppers agree to the chat.

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