People aren’t just making digital purchases more than ever. They are also buying more than ever with their mobile phones.
And for mobile-focused businesses like Snapcommerce, It’s good news.
Snapcommerce, formerly known as SnapTravel, raised $ 85 million in what the company describes as a “pre-IPO” growth cycle to help continue its mission of “changing the way people shop on their phones”.
The Toronto, Ontario-based startup has has developed a vertically independent, AI-powered platform that uses messaging to personalize the mobile shopping experience and “offer the best promotional prices”. While initially focused on the travel industry, the company is now branching out into other consumer verticals – hence its name change.
Inovia Capital and Lion Capital co-led the new growth cycle, which included participation from Acrew DCF, Thayer Ventures, Full In Partners as well as existing backers Telstra Ventures and Bee Partners. The funding brings the total of Snapcommerce raised since its inception in 2016 to over $ 100 million. His latest raise – a $ 7.2 million round from Telstra and NBA star Steph Curry – took place in 2019.
The startup was founded by tech entrepreneurs Hussein Fazal, whose predecessor company AdParlor reached more than $ 100 million in sales, then sold to AdKnowledge in 2011; and Henry shi, who has already built mentioned and worked at Google, where he helped launch YouTube Music Insights, according to previous TechCrunch report.
Snapcommerce launched its first travel-focused product in 2017. It works using chatbots to interact with customers through messaging apps like SMS, Facebook, and Whatsapp. But the company also has human agents ready to help if people need more assistance, in the past mostly serving as on-demand travel agents.
Its service is not only for hotels and flights, but also to help people book restaurants and activities.
“Our goal has been to build this personal relationship,” said Fazal. “A lot of people end up coming back to us when they travel again.” In fact, over 40% of its sales in 2020 came from loyal customers.
Over the years, the company claims to have helped over 10 million users worldwide save over $ 75 million. It expects to cross over $ 1 billion in total mobile sales this year.
And now he is ready to branch out to help consumers save money on products.
“When shopping it’s hard to find the right product and even if you do, it’s hard to find a good deal,” he said. “On a desktop computer, there are ways around the problem. But on mobile, it’s practically impossible. “
The company broke profitability three months after the start of the pandemic in 2020, recording a 60% increase in sales in the second half of the year compared to the second half of 2019, according to the CEO. Fazal.
He then decided to reinvest his profits to continue to develop the business.
“Profitability during the pandemic gave us the confidence that we could turn to profitability whenever we needed it and gave us control over our own destiny, which made this fundraising possible,” Fazal said. at TechCrunch. “The third quarter of 2020 was our best quarter ever. “
The COVID-19 pandemic, naturally, has only accelerated its growth as more and more consumers have turned to mobile.
“We believe the next wave of electricity buyers will be via mobile,” Fazal said. “Some of the new generation don’t even have desktops or laptops and spend all of their time on their cellphones and messaging. So we can be at the forefront. ”
Snapcommerce has an IPO in the works although there is no specific timeline. The company has not disclosed its current valuation or revenue figures. The business earns money by grossing up the prices provided by a merchant or by charging a commission to the merchant.
Chris Arsenault, partner at Inovia and Snapcommerce lead investor, said his company had “tripled” its investment in the startup after witnessing its success in the travel industry.
“Other companies only care about the transaction and force consumers to consult several services to see if they got the best price, while telling them that there are only 2 seats left,” “he said. he told TechCrunch. “We believe that consumers will not accept this type of pressure selling in the future. And Snapcommerce’s ability to build trust with its customers and service providers has drawn us to them as they define what the future of commerce will look like. “
Ultimately, the company plans to use its new capital to continue to scale with the goal of streamlining the entire process of finding, purchasing, and fulfilling mobile orders and making research “the right item.” at the right price like sending a message to a trusted friend “.