Conversation Startup Wizard Raises $50 Million With Help From Marc Lore And Other High-Profile Investors

Marc Lore, former CEO of Walmart WMT   WMT  U.S. e-commerce and serial entrepreneur, is at it again, identifying tech start-ups that sound like the retail realm of tomorrow, but are here today. For example, conversational commerce. His latest find is Wizard, which is building one of the most powerful AI-driven conversational commerce platforms that Lore and other investors believe will revolutionize mobile shopping.

NEA’s Tony Florence recently led a Series A funding round to the tune of $50 million. Not bad for a business that’s yet to launch. Wizard’s founder and CEO Melissa Bridgeford wisely is focusing on a B2B model that will empower businesses and consumers to shop and transact via text, enabling users to bypass the web entirely and execute the entire shopping experience via text, resulting in higher conversion rates and increased sales.

The funds from the Series A round are being used to invest in technology and talent. “We’re focused on hiring top-tier engineers with experience in AI, machine learning, and NLP [a field in machine learning] and expanding our team across functionalities, including sales and operations,” Bridgeford said. “We’re headquartered in New York and we’re hiring engineers nationwide to support a remote tech team.”

“Web based e-commerce was invented for desktop,” Bridgeford said. “Web- based e-commerce is being crammed onto mobile very unsuccessfully. It’s full of friction, full of time and steps and compromised by the checkout process, which is more screens and more clicks. Because that, conversion rates are cut in half. They’re 4 percent on mobile and 2 percent on desktop. 

Bridgeford saw the fundamental shift to mobile solutions in every sector of her own life, citing ride share apps and payment services. “I really recognized this pain point and wanted to solve it,” she said. “We’re on the cusp of being able to provide a very user-friendly format and a powerful scalable format on the back end. We’re white-labeling our technology and enabling brands and retailers to be able to transact with consumers via text.”

The conversational commerce market is on the path to exploding into a trillion dollar market by 2030, and that’s a conservative estimate, Bridgeford said, adding that a large portion of the population is “craving this technology.” 

“Having spent most of my career so far in e-commerce, it’s been clear that conversational commerce is the future of retail,” said Marc Lore, serial entrepreneur and investor in Wizard. “With deep learning becoming more pervasive, the ability to create a hyper-personalized, conversational shopping experience is going to transform how people shop — and I’m confident that what Melissa and the team at Wizard are building will lead that transformation.”

“Mobile first solutions are reshaping the delivery of products and services across every sector of the economy, from ride-sharing to payments to groceries, and there is tremendous opportunity to accelerate innovation with AI, machine learning and other emerging technologies,” said Tony Florence, managing general partner, technology at NEA. “Conversational commerce has the potential to transform e-commerce, and we are thrilled to partner with Wizard as they seek to revolutionize mobile shopping.”

Accel also participated in the round. Lore, Florence and Sameer Ghandi, a partner in venture capital firm Accel have seats on Wizard’s board.

Wizard will focus on consumables and replenishables because of the high repeat orders and low discovery rate. Consumers don’t have to do as much research on, say, laundry detergent, as the would if they were shopping for an Apple Macbook.

Bridgeford pointed out that across categories there’s a portion of consumers who have already decided on what to buy. “Even for higher discovery categories, text captures consumers who know what they want,” she said.

High frequency purchase rate consumer packaged goods are especially attractive for Wizard out of the gate. “That includes the beauty and wellness space as well as other sectors we’re targeting,” Bridgeford said. “Text isn’t meant to capture 100 percent of sales, it’s meat to capture 20 to 30 percent of sales and really grow your sales base.”

Text is capturing a growing consumer type, people who are using Uber UBER and Venmo throughout the day. “Those consumers aren’t walking into stores or sitting at computers,” Bridgeford said. “Text is just a faster way to purchase very quickly.”

Bridgeford has been interested in conversational commerce for some time. Prior to Wizard, she founded a text-based B2C shopping platform called Stylust, which was sold to Wizard “to enable us to leverage technology learnings over the past few years to really accelerate Wizard’s growth and success.”

Before that, she worked in finance at Guggenheim Partners and Cain Hoy Enterprises.

Wizard bears little resemblance to Jet Black, a conversational commerce message concierge-type of shopping service that Lore launched during his Walmart tenure. The retail giant shuttered the service 18 months after it began, banking the learnings for a later date.

Bridgeford is also using Jet Black and her former company Stylust to inform Wizard. “Jet Black was a B2C strategy. We’re launching in the B2B space, working with retailers and brands to to enable them to transact directly with consumers. Our back end is automated, AI-driven conversational commerce. There’s a lot of ways to slice conversational commerce. We’re excited to leverage the learnings from Jet Black and my former company to build a more powerful product at Wizard.”