In another demonstration of the power of machines to solve problems that used to be the sole domain of humans, Persado Inc. has raised another $21 million for software that aims to replace copywriters with computers.

The Series B round was led by StarVest Partners and includes Citi Ventures C -1.41%and American Express Ventures, the venture arms of two Persado customers, along with current investor Bain Capital Ventures.

Persado was founded in New York in 2012, spinning out of founder and Chief Executive Alex Vratskides’s previous company, the mobile marketing company Upstream S. A.

It specializes in creating automated messages that try to persuade people to take action, the kinds of messages that traditionally have been written by copywriters and include appeals to buy something, renew a contract, and so on.

Citi uses Persado for its credit card business and says the rate at which its emails are opened has increased by 70%. In addition, the rate at which recipients who open those emails go on to click on them has increased by 114%.

“We have never lost to a human,” Mr. Vratskides said. “I’m a mathematician , and I can guarantee you, it’s like a computer losing to a human on a chess game, even worse than that…It incorporates a lot of randomness to get there, it’s like getting a needle in a haystack. We built the haystack. The human brain does not work this way.”

Persado’s software is successful because it’s solving what is essentially a finite mathematical problem, Mr. Vratskides says, incorporating the components that go into persuading someone—the language, the emotions, the product features—and then picking the right combination of phrases to get them to act.

These variables may be too numerous for a human to calculate. In getting a customer to renew a contract, for instance, should Verizon Wireless, a Persado customer, suggest in the subject line that the customer will be rewarded for her loyalty if she renews, or that she will miss out on a new phone by not acting soon?

Machines can handle such challenges, Mr. Vratskides said, running quickly through all possible combinations and then testing which approaches work best.

Raising money in 2012 when Persado started out was hard, he said, because the company had a patent-pending algorithm that had been proven only for SMS, and U.S. investors were not impressed. Bain Capital Ventures agreed to lead a $15 million Series A round that was announced in February 2013.

Since then, however, Persado has grown. The company goes after “big companies trying to sell big things,” he said, and now claims about 50 Fortune 2000 customers, with the strongest demand coming from financial services, retail, telecommunications, travel and hospitality.

The new money will be used to expand Persado’s salesforce, which wins deals from large companies by offering to match its software against human writers, and to expand beyond email into new distribution channels and new markets.

Upcoming markets include politics, government and health care, Mr. Vratskides said, and “on any of those issues, the attention deficit disorder [of the public] still stands.”

As part of the funding, StarVest founder and General Partner Laura Sachar joins the board. Oracle Corp.ORCL -2.26% Senior Vice President Reggie Bradford has also invested in the company and joined the board. Oracle acquired Mr. Bradford’s most recent company, the social marketing company Vitrue, in 2012.

Total funding is now about $37 million. Persado is close to profitability and may not raise more money, Mr Vratskides said.

Image credit:  Sebastien Wiertz
Via The Wall Street Journal