• Czech e-commerce search optimization provider Persoo exits from Presto Ventures and Lighthouse Ventures through acquisition by Luigi’s Box
• Persoo and Luigi’s Box work in the same niche and were direct competitors
• The joint team expects to fully integrate their products by Q3 2024 with the ambition of becoming #1 in Europe

This January, Slovak e-commerce search optimization provider Luigi’s Box announced the acquisition of Persoo, the Czech startup of a similar profile. The M&A deal itself was closed in late December 2023.

Growing Shoulder to Shoulder

Both companies were founded in 2014 and grew almost hand in hand, competing in the region and eventually Europe-wide. Using somewhat different technological solutions, both Luigi’s Box and Persoo were employing AI/ML to optimize search engines within e-retail services. The main difference between the two was that Luigi’s Box started in the search space and Persoo in the recommendation space. Therefore, the joint new product can leverage the best of both worlds.

The benefits of embedding AI/ML in this field are apparent. According to Luigi’s Box’ numbers, only 1 to 5 percent of searches end up with no results when the e-retailer employs AI-enhanced search, which presents a skyrocketing efficiency compared to 10-20% (or even 40% in some cases) without using such instruments. Persoo reports that its solution has increased companies’ conversion rates from search by an average of 10-15%.

There is a self-apparent room for growth in this field. In 2023, for the second year in a row, Deloitte ranked Luigi’s Box among the fastest growing technology companies in Central Europe, while Persoo was ranked in the Technology Fast 50 for the Czech Republic.

Persoo’s co-founder and CEO (who now joined Luigi’s Box as partner and VP of domestic markets) Pavel Pinkas admits that the two companies have been following and inspiring each other for several years, and the idea of joining forces came up several times.

‘The product synergies will be a great benefit for our joint client base. I’m excited about Persoo joining Luigi’s Box, forming an even stronger European player. I look forward to combining our strengths, expertise, experience, and ideas,’ Mr Pinkas states.

Setting Sails for Joint Success

The teams report that the Persoo product is currently migrating into Luigi’s Box. The ultimate goal is to harness the best features from both services

‘We’ve been working with Persoo on the acquisition for several months. We have a similar company culture, product, and vision for the future of e-commerce. Persoo’s team is very experienced and brings a new perspective on the same topic that we’ve been working on for the past few years,’ Luigi’s Box’ co-founder and CEO Gejza Nagy shares.

More specifically, the synergies of the acquisition are expected to become feasible starting in the third quarter of this year. Luigi’s Box and Persoo were two competitors in the same region, growing nicely year over year with a very small overlap. We were able to target and get e-commerce and corporate customers.

The Exit

The M&A deal represents Persoo’s exit from the well-known Czech VC funds Lighthouse Ventures and Presto Ventures who first backed the startup in 2019.

‘Thanks to their previous experience in Seznam.cz, a local search engine, the Persoo founders had a background in search optimization and already had clients who were happy with their product,’ Presto Ventures partner and CFA Roman Nováček recalls.

After supporting the founders through some challenging periods, the funds team was all aligned that exit was the preferred option to next-round fundraising. Once this became clear, it was mostly about discussing potential buyers that would see the most upside in the acquisition.

Into the Future Hand in Hand

‘It’s impossible to know what would happen without the acquisition. Persoo’s initial expansion to Romania has started successfully and perhaps a lot could happen on that front, but overall the company will be stronger under the wings of Luigi’s Box. We’re happy with the exit and look forward to following their joint success in the future,’ Mr Nováček tells ITKeyMedia.

‘Our product becomes stronger. Our customer base becomes stronger. But the main advantage is that our teams got stronger,’ Mr Nagy adds.

With Persoo’s acquisition, Luigi’s Box firmly holds the #1 position in Central Europe, and the joint team believes it can go much further. The shared objective is decisive and straightforward: to become number one in Europe.