- Prague-based e-commerce facilitator Outfindo secured EUR 900K of Seed investment
- The startup employs AI to help e-commerces improve their shoppers’ experience by narrowing down their choice to several most fitting options
- The mission is to make online shopping more customer-centric
- The new investment will allow Outfindo to expand to new verticals and geographies
Czech guided selling startup Outfindo landed EUR 900K in its Seed Round this August. The lead investor of the round was the famous Czech fund Presto Ventures (known, for example, for investing in GoRamp). Other investors included Patero and Bob Dohnal and Miroslav Vlasák of Longevity Fellows.
The Burden of Choice and the Fallacy of Product-Centrism
The startup founder and CEO Jan Matějů has such household names as Telefónica O2 and Dáme Jídlo (Czech Delivery Hero) on his resume, but for quite a while, he juggled his work and competitive cycling. As such, nobody among his family and friends would buy a bike without his reputable advice. Naturally, he was the right person to address and knew how to help them choose the bike, but when choosing any other complex product for himself, he found himself lost in the overwhelming variety of all the available variants and their features.
The experience must be relevant to most of us: when you have a responsible purchase to make, there are just too many details to consider and a lot of variants to compare. The selection may take months.
‘This traditional process involves a deep-dive into research, sifting through reviews and product comparisons. Essentially, customers are forced to become temporary experts just to make the right choice,’ Mr Matějů points out.
So it hit him – how e-commerce has become overwhelmingly product-centric and has completely lost the ‘store expert’ approach we are all familiar with from our local shops. To return the human focus to e-commerce, Mr Matějů enlisted the help of Ondrej Bouda and Martin Chrz and started Outfindo in 2020. The newly founded team toyed with various ideas and approaches before settling down on the B2B SaaS model exclusively in early 2023.
To Make the Choice Easier
Outfindo integrates with e-commerces and prompts the shopper with several questions about the product they are looking for. Based on the response, the proprietary AI narrows down the shopper’s selection to several most fitting options, which significantly decreases the tedious selection time, while also improving the overall shopping experience.
‘AI tries to do what people would do – creative thinking and reasoning. We use AI as we would use a human colleague, but it scales significantly faster. Our AI applications extract information from text and images, compare product images, classify and enhance data,’ Mr Matějů explains.
Afterward, Outfindo helps the e-store to reassure the customer about their choice by providing more insights and comparisons. This is why they call their service ‘guided selling.’
‘We come across a lot of companies trying to augment their business with AI nowadays, even though often it is not necessary. But Outfindo is at the right place at the right time, in an industry that is in need of such a solution,’ Presto Ventures partner and CFA Roman Nováček adds.
According to Mr Matějů, Outfindo’s right timing was an intersection of a few things:
- COVID and the boost of e-commerce.
- Emphasis on cash flow for most e-commerce players.
- Massive adoption and the need to focus on less tech-savvy users who won’t finetune sophisticated search filters.
- The development and adoption of AI to make data-intensive tasks more straightforward and scalable.
Mr Nováček calls Outfindo a prime example of a business that’s being built by an experienced founder who recognizes an emerging market opportunity. ‘This foresight allows Jan and his team to capture a significant share of the emerging market and enhance their product with AI, making it 10x better than the conventional solutions available,’ he tells ITKeyMedia.
As many as 30 e-commerce retailers adopted Outfindo in H1 2023. According to the startup’s numbers, they enjoy a 2-6 times higher conversion rate compared to the regular filters, as well as a significant reduction in returns.
‘So, while customers enjoy a tailored shopping experience, e-retailers benefit from better conversion rates and higher customer satisfaction,’ Mr Matějů says.
More Verticals and Geographies
Naturally, the guided selling process will be different for different verticals. Outfindo started with bikes and e-bikes for self apparent reasons. Next on are washing machines, as well as other verticals (for example, smartphones), – based on popular demand.
‘Developing a product guide for a new vertical takes us a few weeks. Thanks to our tech, it is easy for us to obtain all data needed to build guidance for a new type of product. Most of the work is actually gathering user insights for a given vertical, and we are actively researching a way to automate this using AI,’ Mr Matějů shares.
‘They have built a very unique product which can be applied to different business areas. They started with bikes, now moving to major appliances. Could you imagine what will happen when this will be applied to the online pharma area or electronics?’ Patero’s partner Tomas Formanek says.
Aside from integrating new verticals, Outfindo is ambitious about geographical expansion, too. After all, its Product Guide is by definition a global product, and the startup can already boast about a few international clients and several more in the process of deployment – all in Europe.
Since expansion to new markets and verticals is Outfindo’s primary ambition, the EUR 900K of the raised investment will be allocated to the commercial team and R&D.
Mr Nováček and Presto Ventures are convinced that Mr Matějů has assembled a fantastic team to skillfully execute this strategy, and they have no doubt about backing Outfindo with the current investment.
Integrating Outfindo Product Guide is like getting a seasoned shop-floor assistant to guide online customers. Customers get the information needed to make decisions and are reassured about their choice. The uniqueness of the proposition is about focusing on customers, curating and enhancing the data involved in the shopping process. This is the critical enabler for developing the truly customer-centric Product Guide.
Kostiantyn is a freelance writer from Crimea but based in Lviv. He loves writing about IT and high tech because those topics are always upbeat and he’s an inherent optimist!