Monzo alumni raise £2.8 million to fund 'human-like' AI customer service agents

Monzo continues to be fertile ground for Europe's next generation of entrepreneurs.

Three former Monzo employees have raised £2.8 million in a seed round led by LocalGlobe for Gradient Labs, an AI customer service startup and client of that supports companies in “complex and high-risk environments”. 

With Gradient Labs going from strength to strength, Zyla Accountants is proud to be their accounting partner.

In addition to Puzzle Ventures, Monzo cofounders Tom Blomfield and Jonas Templestein participated in the round. 

Several former Monzo employees have turned to entrepreneurship since Gradient Labs' funding round.

Since June last year, Dimitri Masin, formerly Monzo's VP of data science and financial crime, Neal Lathia, and Danai Antoniou have been building the startup in stealth. 

In a recent interview with Sifted, Masin tells how he left Monzo as a leader of an around 150-person team. 

“Naturally, we spent quite a lot of time looking into operational and customer support problems and seeing how we can make the quality better, improve productivity and automate certain tasks,” he says. “That’s how I acquired deep domain knowledge not only within the operational space but also in AI and machine learning.” 

What's around the corner?

Gradient Labs are building an operating system of AI agents that automate manual, repetitive work.

It has partnered with 10 companies so far, including four fintechs. While the company has not yet generated revenue, it plans to charge a fee when a successful result is achieved by one of its agents.

Gradient's agents may be forced to operate in "high-risk environments" as they deal with money-handling companies. 

To make sure that their agents don't give financial advice to vulnerable customers, the startup has guardrails in place. 

Agents can, for example, assign a case to a more appropriate team if they detect that a customer may be vulnerable. 

Gradient’s clients receive a “Notion-style interface” where subject matter experts can input processes for typical customer queries, such as a change of address request. 

The startup’s AI agents — built on top of Anthropic’s Claude 3.5 Sonnet model — are then fed that information to execute that request. Masin adds that the chance of hallucinations increases since agents can only generate replies based on these existing documents and processes, a technique known as Retrieval Augmentation-Generation (RAG).

“We believe that customer support will be completely redefined over the next three to five years,” he says. “That’s because with today’s technology you can automate 70 to 80% of work.” 

Fintechs and AI

In the wake of Gradient's fundraising, Europe's fintechs are increasingly dipping their toes into AI. Financial services companies are uniquely positioned to capitalize on artificial intelligence, according to Nvidia's head of financial services Kevin Levitt. 

Levitt says the industry is used to operating with new technologies in the context of regulatory and compliance frameworks that protect the ecosystem. 

With Masin's long-term experience working in fintech, Gradient has developed an expertise in reassuring third parties, such as regulators or potential clients. 

“Before you switch it on, you essentially have all the controls in place and you have the confidence that nothing will go wrong,” he says. “And that mindset we took from fintech.” 

Currently a team of 11, Gradient is looking to increase its headcount to around 15 individuals so that it can serve larger enterprises before raising a Series A round. 

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