New capital will fuel further product innovation and international expansion — helping ecommerce companies transform product discovery with AI
SAN FRANCISCO, June 17, 2024 /PRNewswire/ — Constructor, the leading AI-powered product discovery and search platform for enterprise ecommerce companies, today announced that it has closed a $25 million Series B round, bringing the company’s valuation to $550 million. This marks a nearly triple valuation since its 2021 Series A and brings total funds raised to date to more than $85 million. Sapphire Ventures led the round with participation from existing investor Silversmith Capital Partners. With this new capital, Constructor will continue to accelerate product development and innovation — applying the cutting-edge clickstream-based AI it pioneered to further improve ecommerce product discovery — and continue its rapid international expansion.
The oversubscribed Series B round came at a time when Constructor was not actively fundraising. The fresh funds also cap off record-setting growth and momentum for the company – with proof points of recent success, including:
Doubled revenue for the third year in a row.Powered more than 100 billion shopper interactions over the past six months, enabling some of the world’s biggest businesses to drive hundreds of millions of personalized experiences every day.Increased headcount by 45% over the past year.Increased overall customer base by 50% over the past year. Leading ecommerce companies and household names — including Under Armour, Petco, Sephora, Birkenstock, Target Australia and many more — use Constructor’s AI to improve how buyers search for and discover the best items for them.Maintained an average 98.5% client retention rate over the last three years, by far the highest in the industry.Unveiled AI Shopping Assistant (ASA), an award-winning conversational product discovery tool blending generative AI with Constructor’s personalization technology.Expanded internationally — particularly across Europe, the Middle East and Africa (EMEA), where it has tripled revenue since 2022 and increased customer-facing headcount by 133% since the beginning of this year.
“In today’s competitive ecommerce environment, having a powerful AI search solution that can best capture shopper intent is crucial to driving topline revenues — yet until now, existing tech has remained rudimentary,” said Rajeev Dham, Partner at Sapphire Ventures, who will be joining as a Board Director. “With more than a decade of experience in the field, Eli and the team at Constructor have developed a state-of-the-art, AI ecommerce search engine that has delivered best-in-class ROI for many household enterprise brands. We are incredibly excited to partner with the team as they set a new standard in powering a hyper-personalized shopper experience.”
Eli Finkelshteyn, CEO and Co-founder of Constructor, said: “We’re very proud of this fundraise, but it’s important for us to remember that it’s only a symptom of doing good work for our customers. If we don’t use this to do better for them, then we’re missing the point. We started Constructor off with what, at the time, seemed like a crazy idea to most of our industry: that learning shoppers’ preferences via AI can give them a far better search and product discovery experience than simply matching on the keywords they type. We believe putting AI at the core of our system from the beginning has played a large role in the successes we’ve been able to bring our customers — but also believe there’s always room to serve them better, and that’s the main thing we want to use this investment for. Our success will always be a symptom and function of theirs. And through our partnerships with Sapphire Ventures and Silversmith Capital Partners, we’re extremely excited to build out more ecommerce functionality and expand to additional geographies — driving more value for our customers around the world.”
Constructor is well-positioned to continue its relentless pace of product innovation, helping customers apply multiple types of AI — including advanced algorithms, machine learning, large language models, transformers, natural language processing, generative AI and more — to improve product discovery while optimizing for ecommerce metrics that matter. Even as many retailers are tightening their belts under current economic conditions, there has been strong and escalating demand for Constructor’s platform, with companies doubling down on their investments to improve the customer experience. Customers report results including: 16.5% increase in average order value, 247% increase in revenue per visit, 13% increase in search conversions, 92% increase in recommendations conversions, a $40 million increase in revenue, greater than 20x ROI and more.
Leading pet health and wellness retailer Petco recently turned to Constructor to power and personalize search results, browse experiences, product recommendations and landing pages across its website and mobile app — driving a 13% increase in ecommerce conversions and 4% increase in site-wide revenue.
“The thing we liked about Constructor was that not only was it real AI, specifically made for our industry, but that their AI is incredibly transparent,” said Tony Gabriele, Vice President of Digital Strategy, Petco. “None of it is black box – so we don’t have to guess what it’s doing or why – and when we have questions, the Constructor team is always happy to talk us through it. We evaluated every vendor on the market, and Constructor was just different. The system is easy to use, the team is motivated and delightful to work with, and most importantly, it paid for itself plus the cost of switching in less than a year after we implemented it.”
According to a Forrester blog, “Improving product discovery is one of the most effective ways to have a meaningful, positive impact on digital metrics, with a clearly attributable return and relatively low investment (in terms of cost for tech and time to value).” Constructor’s technology and vision play a key role in this, and Constructor was recently ranked highest in the strategy category in “The Forrester Wave™: Commerce Search And Product Discovery, Q3 2023.”
“AI-first companies like Constructor are leading a shift in software away from simply offering workflow management, towards delivering business results,” said Silversmith General Partner, Sri Rao. “We are encouraged by the company’s ability to maintain its dedication to innovation and customer success while navigating rapid growth since our initial investment, and are excited to both expand our commitment as well as welcome Sapphire Ventures as Constructor enters the next phase of growth.”
About Constructor
Constructor is the only search and product discovery platform tailor-made for enterprise ecommerce where conversions matter. Constructor’s AI-first solutions make it easier for shoppers to discover products they want to buy and for ecommerce teams to deliver personalized experiences in real time that drive impressive results. Optimizing specifically for ecommerce metrics like revenue, conversion rate and profit, Constructor generates consistent $10M+ lifts for some of the biggest brands in ecommerce, such as Sephora, Petco, Birkenstock, The Very Group, home24, Grove Collaborative and Fisheries Supply. Constructor is a U.S.-based company that was founded in 2015 by Eli Finkelshteyn and Dan McCormick. For more, visit: constructor.com
About Sapphire Ventures
Sapphire is a global software venture capital firm with more than $10 billion in AUM and team members across Austin, London, Menlo Park and San Francisco. For over a decade, Sapphire has partnered with visionary management teams and venture funds to back companies of consequence. Since its founding, Sapphire has invested in more than 170 companies globally resulting in more than 30 Public Listings and 45 acquisitions. The firm’s investment strategies — Sapphire Ventures, Sapphire Partners and Sapphire Sport — are focused on scaling companies and venture funds, elevating them to become category leaders. Sapphire’s Portfolio Growth team of experienced operators delivers a strategic blend of value-add services, tools and resources designed to support portfolio company leaders as they scale.
About Silversmith Capital Partners
Founded in 2015, Silversmith Capital Partners is a Boston-based growth equity firm with $3.3 billion of capital under management. Silversmith’s mission is to partner with and support the best entrepreneurs in growing, profitable technology and healthcare companies. Representative investments include ActiveCampaign, Appfire, Apryse, DistroKid, impact.com, Iodine Software, LifeStance Health, Onbe, and Webflow. For more information, including a full list of portfolio investments, visit www.silversmith.com or follow the firm on LinkedIn.
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SOURCE Constructor
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