Marc Lore, who earlier this year stepped down from his role as Walmart’s head of U.S. e-commerce, is now backing a new startup in the e-commerce space called Wizard. Lore has taken on the roles of co-founder, chairman of the board and investor in Wizard, a B2B startup in the “conversational commerce” space which believes the future of mobile commerce will take place over text. Ahead of its official launch, Wizard today is announcing its $50 million Series A, led by NEA’s Tony Florence.
Both Lore and Accel also participated in the round. Florence, Lore and Accel’s Sameer Gandhi have board seats alongside Wizard’s co-founder and CEO Melissa Bridgeford.
The startup has an interesting founding story, as it’s not quite as new as it would have you believe.
Bridgeford, who once left a finance career in New York, founded and ran Austin-based Stylelust, a text-based shopping platform that aimed to offer a shopping assistant for consumers. Its users could text screenshots and photos and be served recommendations of products they could then buy over text, without visiting a website. Stylelust took advantage of AI and image recognition capabilities to help provide consumers with options of what to buy. There was also a B2B component to Stylelust, which promised brands a “one-text checkout” experience. According to a cached version of its website, the company touted a 35% conversion rate — or 10x higher performance than web-based commerce.
Wizard says it “acquired” Stylelust, but the entire team (minus a few new C-Suite hires in September), are all prior Stylelust employees. Wizard did not have a product in the market at the time of the acquisition.
Technically speaking, it’s a brand-new company — and one that now has the ability to lean on Lore’s experience in e-commerce as well as that of top-tier investors.
Bridgeford described Wizard as an opportunity “to build our vision on a much larger scale and to partner with Marc, who’s really a tremendous visionary in retail tech and really a proven founder and a proven operator.”
“We really share the vision that conversational commerce is the future of retail,” Bridgeford adds.
The company isn’t yet willing to talk in detail about its product, however. Instead, it describes the B2B service as one that will enable brands and retailers to transact with consumers over text. The service is positioned as “an end-to-end shopping experience” on mobile from opt-in to search to payments and shipping and even reorders.
These text-based chats won’t feel like the annoying interactions you may have had with messaging app chatbots in the past, Bridgeford claims.
“What we’ve found is a combination of automation and human touch really provides the optimal experience for users, while also building a powerful technology on the backend that’s built to scale. That’s really where the Holy Grail is,” she explains. “And that’s really what we see for the future of conversational commerce…we’re incorporating chat abilities, natural language processing — all of those technologies are moving very quickly.”
In other words, the frustrating experience you may have had with a chatbot a year or two ago, may not be the experience you would have today.
“The goal of the technology is to make it seem like you are speaking with a human, when it’s really technology-enabled,” Bridgeford adds.
Stylelust also brought its brand relationships to Wizard as part of the deal.
An earlier version of the Stylelust website listed clients including Laughing Glass Cocktails, Desolas Mezcal, Pinhook Bourbon, Marsh House Rum and Neft Vodkas. A focus on wine and sports retail was also mentioned in an Austin Biz Journal feature. However, a write-up about Florida Funders’ backing of Stylust in 2020 noted relationships with top-tier retailers like Neiman Marcus, Walmart, Sephora and Allbirds.
It’s unclear which relationships will continue with Wizard or whether it will continue to focus on the alcohol brands or other retailers, as the company declined to discuss any details related to its business beyond the funding.
The startup plans to use the funds to hire in areas like AI, machine learning and natural language processing, as well as in non-tech roles, like sales, finance and operations. One of the key hires it’s still looking to make is a chief people officer. Though the current team is working in offices based in both New York and Austin, Wizard is hiring nationwide to fill roles on its remote tech team, it says.
Wizard already has some competitors whose services address certain aspects of its business, particularly in the text marketing space. But more broadly, there are other ways that consumers interact with brands over messaging which could evolve into more fully formed products over time, too. Today, consumers often discover products on social media, like Facebook and Instagram, then turn to Messenger or DMs for product questions. WhatsApp is building out a product catalog for businesses that enables consumers to discover products and services directly in the app. Even Apple entered the market with Business Chat, which already allows for purchases made through iMessage chats.
Wizard’s focus on SMS instead of requiring a dedicated messaging app or, say, an iPhone with iMessage, for instance, could help it to differentiate from competitors. Still, betting on SMS — increasingly a home to text-based spam and scams — is a riskier bet. But it’s one Lore is willing to make.
“Having spent most of my career so far in e-commerce, it’s been clear that conversational commerce is the future of retail,” said Lore. “With deep learning becoming more pervasive, the ability to create a hyper-personalized, conversational shopping experience is going to transform how people shop — and I’m confident that what Melissa and the team at Wizard are building will lead that transformation.”
Source Link Marc Lore-backed ‘conversational commerce’ startup Wizard raises $50M Series A from NEA
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