Conversational commerce isn’t exactly a new phenomenon, with countless companies using live chat, messaging apps, chatbots, voice assistants, and more to encourage consumers to part with their money. As part of that broader move, the mighty WhatsApp, a dominant force in the messaging world, has penetrated deeper into the business arena with a myriad of tools to connect retailers with customers — from product catalogs and collections to shopping carts and Instagram Shops integration.
The conversation market is also quite large, with WeChat reportedly in China facilitating $250 billion in transactions in 2020 alone, but while shopping from messaging apps comes naturally in many markets around the world, particularly in Asia and Latin America, it hasn’t quite reached the same level in Europe – and this is something that German startup Charles wants to change with a platform that combines key conversational components with the marketing power of newsletters.
Two years after its launch, Charles today announced it has raised $20 million in a series of A funding rounds led by Salesforce Ventures, with participation from Accel and HV Capital. This follows a $6.5 million starting round raised last year.
How it works
Founded in Berlin in 2019, Charles presents itself as a complete, end-to-end product that spans the backend and interface, connecting the APIs of messaging services such as WhatsApp to popular e-commerce and CRM (customer relationship management) systems, such as Shopify and Salesforce. Then companies can sell products, send newsletters and provide follow-up support.
While the sales and service aspect of any conversational software should be expected, the newsletter facet is an interesting addition. A WhatsApp newsletter may contain a discount, special offer, product announcement, or video message, but most importantly, it is designed for the medium it is consumed on (i.e. a messaging app) rather than the traditional email format.
Newsletters are essentially one-to-many “broadcasts”, except when accessed via the API, businesses can send to an unlimited number of recipients at once – default broadcasting in WhatsApp is limited to 256 people. In addition, retailers can use the Charles platform to create automated opt-in flows (for example, by clicking a button or scanning a QR code on a website), with access to performance analytics to show how a WhatsApp newsletter grows in terms of engagement.
Conversational commerce is coming to Europe
A quick glance around the world reveals a flurry of activity in the conversational commerce space, with the likes of Whym, Zeals, Yalo and Wizard all recently raising funds to target markets in Asia or the Americas. Elsewhere, Vonage recovered Conversational commerce company based in Singapore Sweater.
This shows how Charles wants to differentiate himself: it wants to emulate the success of these other companies in markets closer to home. And this is what his new $20 million cash injection will be used for, as it looks set to expand his horizons beyond his native Germany.
A point worth noting is that Charles built his platform specifically with European data privacy law (i.e. GDPR) in mind. For example, with WhatsApp newsletters, Charles presents double opt-ins to customers after they have indicated that they want to receive WhatsApp messages – so that the customer can ask to sign up for the newsletter (first opt-in), and then are asked to a second time to confirm this is what they want. And this is all automated.
“With Europe in mind, one of our key differentiators is the fact that we’ve built in GDPR compliance from the start,” Charles co-founder and co-CEO Artjem Weissbeck told londonbusinessblog.com.
Not everyone will be happy that targeted marketing and advertising lands in their WhatsApp inbox every day, which is why Charles focuses on the opt-in/opt-out workflows. It is not the same as email, and it should be treated accordingly.
“To be GDPR compliant, brands need an initial opt-in from you for notifications, while an opt-out is possible at any time,” Weissbeck continues. “That’s why we also help brands with our automated opt-in and opt-out technology, and our success team advises them on the frequency and relevance of notifications. Unlike email, they need to be low-frequency and relevant to respect the intimacy of the channel and maintain consumer trust. On average, this means one to two campaigns per month.”
While Charles has seen the most traction in its domestic German market, it has already seen some inbound interest from Italy, Spain, France, the Netherlands and the UK. And in the longer term, it sees itself expanding into markets elsewhere.
“These are the countries where we have started expanding, and over 20% of our customers come from there – mainly Italy and the UK,” added co-founder and co-CEO Andreas Tussing. “Our ultimate ambition is global and we selectively test with companies outside of Europe.”
In his relatively short life so far, Charles said some of his more than a hundred customers have already reached 7-digit WhatsApp revenue this year, representing up to 40% of their total revenue. But Charles is aware that while WhatsApp is an excellent messaging platform in Europe, it is not the only player in town – which is why it also supports Instagram Direct and Facebook Messenger, while also working on support for Telegram, iMessage, RCS , Google MyBusiness Chat and SMS.
“However, most businesses in Europe are targeting WhatsApp as consumer penetration is highest, rich formats are advanced and API capabilities for businesses the most advanced,” notes Tussing.