Snapcommerce wants to change how consumers shop on their phones. To that end, on March 4, the company brought home an $85 million growth investment round it will use to launch products in other verticals after the success of its first offering, Snaptravel.
Bee Partners participated in this growth round, which was led by Lion Capital and Inovia Capital along with participation from Acrew DCF, Thayer Ventures, Full In Partners, and existing backers Telstra Ventures. Snapcommerce’s total raise since 2016 is now over $100 million (its 2019 $21 million Series A included investment from NBA star Steph Curry).
The company, led by Hussein Fazal and Henry Shi, launched its travel services in 2017, funded by a first check from Bee Partners the year before. Since then, it has used conversational AI in apps such as SMS, Facebook, and WhatsApp to help consumers book flights, hotels, restaurant reservations, activities, and more, offering real human agents when additional help is needed. The service shows customers the best deals via a text-like interface, removing the challenge of switching between tabs to comparison shop on mobile.
In 2020, a year of unprecedented challenges for the travel industry, Fazal and Shi deftly managed to achieve profitability by taking quick action to increase spending among travelers still looking for deals. That swift thinking allowed them to aim for a wider set of verticals to expand service--and revenue.
On the heels of their recent funding news, we caught up with Fazal and Shi to learn more about the personalized ecommerce marketplace they are helping to define, and their plans for Snapcommerce’s growth over the long-term.
What are the advantages of conducting commerce over messaging? Why are so many customers doing this?
One advantage is that we are enabling customers to easily find a great deal. From a customer value perspective, they simply send a message with what they are looking for and we can present them with a great offer, saving them time and money. Merchants on the other end are able to offer specific promotions to specific people. As opposed to paying the normal costs of advertising and distribution--having to create generic discounts, offers, and coupon codes--merchants are able to be more targeted and effective with their pricing strategies.
The second key advantage is that once a customer has conducted commerce with us over messaging, we can then leverage that relationship to offer them value beyond their initial purchase. For our Snaptravel product, that means giving them timely notifications (weather reports, navigation maps, Uber updates, restaurant suggestions, etc.), and providing them with 24/7 support over messaging. For instance, they can tell us they are running late and need to ensure a late check-in, and we’ll handle that for them. And, ultimately, it means getting our AI to learn who that customer is and what they are looking for, and pushing out future personalized deals and offers directly to them.
2. How does this apply to other verticals and your planned launch into the Goods space?
The platform can be applied to really any vertical. Consumers want a better way to shop on their phones and every merchant needs more sales and is looking to extend reach through new and existing channels. Snapcommerce allows merchants to push out promotions to the right people at the right time. This already happens in many cases. Very often you will be shopping on an ecommerce site, add something to your cart, then get distracted and abandon that cart only to find a coupon in your email inbox encouraging you to return to check out. The concept of offering promotions to certain customers to drive conversion is well known. We enable this at scale, with every customer, and directly into a customer’s most personal channel--their messaging inbox. Think of it as a personalized ecommerce marketplace.
3. Are you willing to share a quick trick or insight on customer engagement that you've been successful with?
We know we must respect a customer's messaging inbox, as it’s a very personal channel. We have internal guidelines that a customer should have received at least four non-promotional messages before receiving one promotional message. We want to ensure that it feels like an active conversation and we are someone they are excited to receive a message from. Every time we run informational or promotional campaigns, we very closely monitor engagement rates, conversion rate, block rate, and overall customer NPS to ensure we are creating a great customer experience and sending our customers messages that they want to receive.
About Bee Partners
Founded in 2009, Bee Partners is a pre-Seed venture capital firm that partners with revolutionary Founders working at the forefront of human-machine convergence across technologies that include robotics, AI, voice, i4.0, and synthetic biology. The firm leverages a singular approach to detecting new and emerging patterns of business as well as inside access to fertile but often overlooked entrepreneurial ecosystems to identify early opportunity in large, untapped markets. Bee’s portfolio companies consistently realize growth at levels that outstrip industry averages and secure follow-on capital from the world's top VCs.