Lily AI gets $25M boost to ease e-commerce search
Lily AI, a SaaS platform that helps online shoppers find items, will use a $25 million infusion to fuel expansion into new retail verticals and markets.
Why it matters: Even in recessionary environments, the strongest retailers are those that “keep the consumer at the center of your business,” CEO Purva Gupta tells Axios.
- As retailers hone their e-commerce and omni-channel strategies, they'll need tools to meet ever-evolving customer demands and trends.
Driving the news: The company announced its Series B, led by Canaan Partners with Conductive Ventures, Sorenson Ventures and NEA participating.
What’s next: Mountain View, California-based Lily AI will use the funds to attract more top retailers and reach mid-market e-commerce brands across home, beauty and fashion.
- Primarily concentrated in North America, Lily just landed its first customer in the U.K. — which the company sees as its next market, Gupta says.
- “We started by working with some of the largest players to sort of prove our hypothesis, and also prove that this does the scale,” Gupta says, adding she hopes the company can do so in other lifestyle categories.
State of play: Generally, retailers manually input a few basic product attributes — so the most information you'd get from a shopper’s clicks might be a dress color or fabric, Gupta tells Axios.
- “It's working on really poor product understanding and consumer understanding,” Gupta says, adding, “It's not going to get you good results.”
How it works: The company uses AI-powered image recognition and natural language processing to extract more attributes from a retailer's product catalog and ascribes common search terms to those products.
- For instance, if a shopper searches a phrase like "statement blazer," they can find relevant products on a retailer's website.
- With LilyAI, shoppers can find seasonal or occasion-based products, or even products associated with micro trends such as “coastal grandma.” (Think Diane Keaton in a Nancy Meyers movie; thanks, TikTok.)
- In addition to optimizing search, Lily’s applications can be used for recommendations, assortment planning and demand forecasting, Gupta says.
What they're saying: “What is really bridging the gap is what the consumer is actually saying,” Gupta says.
- “The pull of this type of a product for the industry is something that we are definitely seeing, and that's making us understand…who are going to be winners who have this forward mindset,” she says.
Of note: The company has garnered interest from top retailers, and it already counts Bloomingdale's, Gap, Macy's and thredUP as its customers.
- “We're able to see this massive validation working with the largest players,” Gupta says.
- “How many products are able to say we’re able to move the needle by $100 million” in additional revenue opportunity?