$18M For Software Maker Banter Systems$18M For Software Maker Banter Systems

Banter Systems Inc., a maker of software that helps businesses respond to customers' E-mail and instant messages, this week said it has raised $18 million in a fourth round of venture funding. Investors included Financial Technology Ventures, Mayfield, RBC Technology Ventures, and Lucent Venture Partners.

Banter's software, including Reply and Server, reads and categorizes E-mails, instant messages, Web forms, and other written forms of communications from customers. Companies use Banter's software to build applications that provide automatic responses or route notes to the right employee for handling. It can, for example, be the core of call-center apps that give service reps prepared responses to written queries.

The result should be better customer service and lower support costs. "Any company that receives a high volume of service inquiries over the Web can benefit from these natural-language processing tools as they have a direct impact on the staffing volumes required to handle customer contacts," Jupiter Media analyst David Daniels says. Jupiter forecasts that customer-service E-mail volume will soar from just under 900 million this year to more than 3 billion in 2006.

Banter's software has been on the market for several years and is particularly popular among financial-services companies, including RBC Financial Group, Wells Fargo, and ABN Amro.

Banter was founded in 1997 and raised more than $30 million in three previous rounds. Although privately held Banter does not disclose its revenue, it expects to be profitable next year, CFO Tom Ream says. The additional funding will be used to develop new applications for Banter's software, such as E-mail archive retrieval, and for international expansion.