It’s a big week for startups developing technology for ecommerce marketplaces. We saw companies like Nautical Commerce bring in $30 million in Series A funding to help businesses of all sizes create their own marketplace. Meanwhile, Shop Circle made its public debut with $65 million in the pocket of apps so Shopify merchants can quickly set up their businesses.
And why not, the sector is big business: it is estimated that some $3.2 trillion has been spent in the best marketplaces worldwide by 2021, with those like Taobao, Tmall and Amazon accounting for more than 60% of activity, according to research firm Digital Commerce 360.
Andrew Yates, co-founder and CEO of Promoted.ai
Now it is promotedturn. The Bay Area company, which brings together search, feed, advertising and promotions for marketplaces, announced it needed an additional $6 million in seed funding to bring the total raised to $8 million.
We profiled Promoted in November 2021 when it raised that first $2 million. The company was launched in 2020 by two former Pinterest engineers, Andrew Yates and Dan Hill, with a two-pronged model: help buyers find the products more easily on marketplaces to drive repeat purchases, and give sellers instant feedback on how their products look in a search and tools to improve sales.
When it first started, the company worked with clients like SnackPass and Hipcamp, and has since added more, including Outschool and Teachers Pay Teachers.
“We’ve performed for some great marketplaces and signed up for new, even bigger clients,” Yates told londonbusinessblog.com. “This is not just plug-in-play, we are making marketplaces more efficient. In November, we shared a single digit improvement for Hipcamp, but now it’s double digits. We’re seeing bigger scales and more efficiency, and now we’re doubling down on connectivity.”
For many marketplaces, those search, recommendation, and advertising features tend to be silos, but Promoted has them all under one umbrella with data measured and optimized in real time, using artificial intelligence. That provides a 360-degree view of the data, so the marketplace can predict conversions and clicks for its search and feed, Yates said.
Yates said the round closed earlier this year. It was led by Y Combinator – Promoted was part of the 2021 winter cohort – with the participation of Interlace Ventures, Vela Partners and a group of angel investors including Michael Seibel, group partner and managing director at YC.
In the past 12 months, the company has tripled its revenue, so building on that momentum, Yates plans to use the funding to hire additional engineers, technology development to build out Promoted’s infrastructure, its data optimization and measurement capabilities, and putting away part of the “war chest.”
In the future, the company will focus on promotions. Some marketplaces don’t run paid promotions, and they might, Yates said. In addition, the company is building a community of its marketplace customers with the ultimate goal of creating a sort of ‘ads networking’ component where customers can get ideas from each other.
“Lately, we’ve seen product management teams at a client looking to trade tips with another marketplace, so we’re building a community of experts,” he added. “This allows us to strengthen networks and connect people.”