Yieldify is trying to solve what CEO and co-founder Jay Radia calls “a trillion-dollar problem” – which is part of why the company has been able to attract such big-name investors.
The London-based startup announced an $11.5 million Series A funding round on Thursday led by Google Ventures and SoftBank Capital.
At the moment, conversions on desktop and mobile for retail sites are marginal, with fewer than 10% of visitors converting. Avid Duggan, general partner at Google Ventures, is one of many who are racing to find that solution.
“Traditional customer abandonment solutions still haven’t cracked the code to retaining and converting online visitors,” Duggan said.
Retail associates in physical store locations generally do a good job of guiding shoppers toward products that are the best fit, at the same time figuring out which of those shoppers have real intent to buy versus those who are just there to window shop – but ecommerce is still in need of that solution.
Getting in on that online conversion vacuum was important to Softbank Capital partner Joe Medved, who noted that companies are “increasingly prioritizing new strategies for conversion optimization.”
Yieldify is going to use its new investment to ramp up its nascent data science team, Radia said, with the majority of the Series A round earmarked for hiring data scientists and engineers.
Google has shown an eye for companies that are dedicated to a managed service approach, often a kind of shorthand for the significance of a tech vendor’s data science services. Radia emphasized that this funding will expand Yieldify’s capacity to provide full-service campaign management.
Yieldify’s software also helps shine a spotlight on a narrow part of the customer funnel that hasn’t gotten much exposure – the lower end.
“We’re very laser-focused in the lower end of the funnel, just before a user leaves a site or when they don’t clearly know what they’re looking for,” Radia said.
Rather than licensing its software for a subscription fee as other companies do, “sometimes charging tens of thousands of dollars or trying to demand a yearlong deal,” Radia said that Yieldify’s monetization strategy is to take a percentage of the additional revenue it generates for a site.
“Retailers are more of a partner than a client,” he said.
The result is that Yieldify only gets paid when the retailer gets paid, a monetization model Radia called “disruptive.”
And unlike other ecommerce vendors, like HookLogic, for example, Yieldify doesn’t generate advertising revenue. Brands don’t advertise on-site and therefore aren’t jockeying for prime search position within. Calls to action are instead triggered when a user indicates some form of intent – such as being offered a coupon for purchases over $100 if items in the shopping cart pass that mark. Yieldify even goes so far as to track what parts of the page visitors hover over with their mouse.
In this way Yieldify is also aiming to improve the mobile web experience, though it’s relevant to note that Yieldify doesn’t provide software for retailers’ apps.
“We want to bring retailers to mobile, with a real focus on the web,” Radia said. “We think that’s a big opportunity many ecommerce companies are missing.”
The startup’s focus on mobile likely appeals to Google, which benefits from essentially any improvement in the mobile web experience, particularly technology that can draw retailers’ attention and marketing budgets from apps to the web.
Figuring out mobile is also the first step toward what Radia described as a more long-term goal, which is to connect Yieldify’s data collection and marketing with the physical retail world.
“The technology isn’t quite there to bridge that, and adapting to mobile is more pressing from my perspective,” he said. “But connecting to loyalty programs and in-store data sources is something we want to do.”
