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Klevu, a company developing AI products that personalize ecommerce search and discovery experiences, today announced it has closed a $ 12 million series A round. This marks the launch of Klevu’s Discovery Suite, an end-to-end solution that captures online shoppers’ intent to boost conversions, average order value, and loyalty. And it will help fund Klevu’s Global Semantic Lab initiative, which aims to build “next-generation” technologies at the intersection of machine learning and natural language processing for ecommerce.
While year-over-year consumer spending in the U.S. dipped last month, the pandemic has supercharged ecommerce. According to data from IBM’s U.S. Retail Index, business closures and shelter-in-place orders accelerated the shift to digital shopping by five years, with online shopping projected to grow nearly 20% in 2020. Based on the survey data from BMC and Mercatus, ecommerce grocery orders alone totaled $ 5.9 billion, up 3.6% from $ 5.7 billion in August.
Cofounded in Finland in 2013 by Nilay Oza, Niraj Aswani, and Jyrki Kontio, Klevu aims to connect people to products they wish to buy. Through AI and natural language processing-powered technologies, the company’s products help merchants deliver relevant experiences powered by behavior.
Klevu says its search product, which plugs into ecommerce platforms like Shopify, continuously learns from shoppers’ interactions to optimize results. It automatically handles typos while identifying and understanding stop words (e.g., “iPhone” in the phrase “iPhone with case”) and adding contextually relevant synonyms to product catalogs. Klevu also enables merchants to fine-tune search results using rules across certain categories and keywords.
Klevu’s complementary category merchandising product reacts to trends in real-time data, enhancing the results that customers see on product category pages. Featuring filtering and custom layouts, Klevu claims it improves website usability by delivering a consistent experience across mobile and desktop.
“Text mining is all about analyzing a piece of text and identifying hidden meaningful information from within it. At Klevu, several AI techniques are used to make this happen in the ecommerce domain,” a spokesperson told VentureBeat via email. “Our objective is to enrich the catalog with the information, originally missing in the catalog, that the shoppers may search for … In our training data, we have millions of products from 45 different industries and in 30 different languages. The product data is systematically organized with various product attributes and images associated with each product. This data is then further enhanced, automatically, with an average of 10 million shopping signals collected daily directly from the high-intent shoppers to understand how they search, locate products, and use them.”
Conversion remains a challenge in the ecommerce space, despite the pandemic-bolstered growth. As of Q1 2019, just 2.72% of ecommerce website visits converted into purchases, according to Statista. In a recent report, KPMG stressed the need to promote relevant products right at the time of checkout, which the firm said can have an outsized impact on buying decisions.
Klevu customer Puma says it saw an over 50% increase in search-led conversions on one of its websites after adopting the platform. Besides Puma, Klevu says more than 3,000 brands, including Yamaha, Callaway, and Jack Daniel’s, have made over 5 billion APIs to its product.
“Amazon is well known for product discovery, and Google is known for its content,” Oza told VentureBeat via email. “Klevu marries these two together to provide a seamless shopping journey, ensuring the consumer is served the most relevant products and stays highly engaged. With this investment, we are well-positioned toward our mission of democratizing discovery in online retail. We will further invest into strengthening our leadership in machine learning- and natural language processing-led innovations for online retail that bring data-driven business success for our customers.”
Alfvén & Didrikson led Klevu’s latest funding round, with participation from existing investors EVLI Growth Partners, Jerry Pruttz Holding, and Jonas Dromberg. Klevu has over 90 employees across offices in the U.K., U.S., India, Australia, and Sweden, in addition to Finland. And the company has raised over $ 17.5 million to date.
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