Stefanos Loukakos, the former director of Meta’s business-centric Messenger division and briefly involved in the company's blockchain efforts, observed several years ago that online retailers faced challenges in effectively reaching potential customers. He believed the issue stemmed from poorly targeted marketing campaigns. Many merchants resorted to sending generic messages via social media, text, and email, which often failed to engage buyers and drive conversions.
“Businesses need a solution to create effective messaging campaigns and automate conversations with both leads and customers,” Loukakos explained. “The ideal solution can also provide personalized product suggestions, ensuring customers discover items they'll love and allowing companies to gain valuable insights into their audiences.”
A pivotal moment came when Loukakos connected with Yandong Liu, the former CTO of Strava and a past researcher at Yahoo, through a mutual acquaintance in the startup community. Their shared passion for messaging-centric marketing led them to establish Connectly.ai in 2020. The innovative platform harnesses the power of AI to assist businesses, particularly retailers and larger e-commerce players, in selling their products and services through various messaging channels. As Loukakos specified, customers can “send and receive messages without needing to host, manage, or worry about software updates.”
Connectly’s platform seamlessly integrates with popular messaging applications and services—including WhatsApp, Instagram, SMS, and web-based chatbots—allowing brands to design advertising campaigns and automate basic customer interactions. The AI technology, tailored to a retailer’s product listings and preferences, connects with the brand's online store to send alerts about price changes, stock updates, and special promotions.
Additionally, Connectly identifies products that interest customers, enabling the automatic creation of audience segments. For instance, it can pinpoint when a customer abandons their cart and promptly send a follow-up message with a discount code or lower shipping rate.
When asked about Connectly’s approach to transparency and data privacy, Loukakos confirmed that the platform's bots clearly identify themselves and that Connectly is “fully compliant” with GDPR, allowing users to opt out of brand communications at any time.
However, there’s a question of whether consumers actually prefer engaging with companies through chatbots. A recent survey conducted by customer experience platform Callvu found that many consumers would rather wait for a minute to speak with a live agent than opt for instant communication with an AI.
Despite this, businesses are increasingly leveraging AI for more than just enhancing customer interactions. Gartner predicts that contact center operators will aim for $80 billion in labor cost savings through broader AI deployment in the coming two years. By 2026, it is expected that one in ten customer service agent interactions will be automated, as companies streamline operations.
Many brands see Connectly's technology as a valuable investment. Loukakos noted that Connectly has over 300 paying customers and anticipates revenue to double in 2024, following a fivefold increase last year.
While Loukakos didn’t disclose exact revenue figures, he mentioned that Connectly generated $3.5 million last year, suggesting it could reach approximately $7 million by year’s end.
In a competitive landscape, filled with both startups and established companies in the conversational e-commerce domain—such as Attentive, Twilio, Infobip, Bird, Take Blip, and Yalo—Connectly has attracted significant interest from venture capitalists. Recently, Chinese retail giant Alibaba led a $20 million Series B funding round for Connectly, bringing the total funding to $37.2 million and valuing the company at around $100 million.
Could Alibaba's investment hint at a potential strategic partnership with Connectly? While Loukakos remained tight-lipped, he acknowledged that their support is “profoundly impactful to Connectly’s potential.” An Alibaba spokesperson stated, “We seek partnerships with innovative companies that are shaping the future of their industries. Connectly exemplifies this with its AI-driven conversational commerce solutions.”
Unusual Ventures, Volpe Capital, RX Ventures, and Falabella Ventures also participated in Connectly’s Series B funding. Loukakos indicated that these funds would be used to enhance Connectly’s platform and expand its San Francisco-based team from 65 to nearly 80 employees by year-end.
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