Tactful AI targets USD 5-10 mn Series A after USD 1 mn pre-Series A

Tactful AI is looking to raise USD 5-10 mn in a Series A round in early 2027, co-founder and CEO Mohamed Elmasry (LinkedIn) tells EnterpriseAM. Investor talks are still in an early stage, with the company receiving inbound interest but not yet actively pursuing a raise as it focuses on operations, Elmasry says. But he says he is ready for any potential delays — “the more I achieve with my clients, the easier the Series A would be anyway.”

About Tactful: Founded in 2016 by Elmasry, Mohamed Hassan (LinkedIn), and Sherif Khairallah (LinkedIn), Tactful AI is a Cambridge- and Cairo-based CX company that uses AI to help businesses manage customer interactions across social media, customer service, and sales channels.

The company is moving beyond traditional chatbots into agentic AI, which can handle customer requests from start to finish, including tasks like tracking orders and updating CRM systems. Its clients include Elaraby Group, Raneen, 2B, Erada Finance, and Simplex. Tactful says (pdf) its annual recurring revenue has grown 11.7x since January 2025.

IN CONTEXT- Its pre-Series A, including an extension that brought in former Etisalat CEO Hatem Dowidar earlier this month, totals around USD 1 mn, Elmasry says, without disclosing individual ticket sizes. The pre-Series A was co-led by Foras AI and M Empire, and Elmasry and Hassan also put money in, according to the release (pdf). The company did not need the funding, he adds; it wanted credible strategic investors on board ahead of its Series A.

Credibility test: Investors usually want to know whether Tactful’s AI is native or just a wrapper around existing models, Elmasry says. “Everyone can say, ‘I’m doing something with AI.’ So what do we really do with AI? Is it native? Is it true? Or are we just a shell product of some AI models?” His answer is to point to Tactful’s clients, founders of client companies who put their own savings into the round. He says some investors came in through client referrals. “You see the level of commitment and the level of trust.”

The years under Dstny left Tactful with a product backed by mns in R&D investment, according to Elmasry. The Belgium-based business communications group acquired Tactful in 2022 and injected mns into the product's R&D between 2023 and 2024, according to Elmasry. Rising interest rates later pushed Dstny’s private equity backers to cut costs, he explains, and the founders bought the company back last year. “It was a case of bad timing, [but] we actually became profitable because of the two transactions. We didn’t pay as much as we got when we sold it, and we got a much better and more ready product,” he says. The buyback was announced in July 2025, although neither transaction’s value was disclosed. The founders came out of it with full ownership of the IP and no restrictions on where they can sell, he says.

The focus now is on getting existing clients to spend more. Tactful's net revenue retention is close to 120% over the past 12 months, with the company targeting 200% by year-end, Elmasry says. Some clients are already paying 2.5x what they initially signed up for, and one will be at 6x its initial contract by early next year.

Tactful also plans to take its product to customers in the UK and the rest of Europe in 2027, with ambitions to capture 10% within five years of the roughly USD 1 bn in annual EMEA sales that Elmasry attributes to a global competitor he did not name. The company sees the likes of Genesys, Salesforce, Cisco, Zendesk, Freshdesk, and Intercom as its main competition for contracts, rather than regional AI startups.

Tactful acts “as an advisor before a vendor,” Elmasry says. “We don’t give them a bag of tech and [say] you guys figure out what to do with it. We give them the outcome, and we give them the quality.”