Connectly: Revolutionizing Conversational Commerce with AI-Driven Personalization

Stefanos Loukakos, a former director at Meta’s business-focused Messenger division and briefly at the company’s blockchain organization, noticed several years ago that online retailers were having a hard time reaching potential customers. The core issue, he believed, was a lack of personalization in their marketing efforts. Many businesses were relying on generic messages across social media, texts, and emails that didn't connect with buyers or drive sales.

“Businesses need a way to create more effective messaging campaigns and automate interactions with both prospects and customers,” Loukakos explained. “Ideally, this solution should also be able to make personalized recommendations to help customers find products they love and enable companies to better understand their customer base.”

Everything fell into place when Loukakos met Yandong Liu, the former CTO of Strava and a past researcher at Yahoo, through a mutual connection in the startup community. They quickly bonded over a shared interest in messaging-based marketing, and in 2020, they co-founded Connectly.ai. Their company leverages AI to help businesses, particularly retailers and e-commerce enterprises, sell their products and services across various messaging platforms. As Loukakos put it, their customers “can send and receive messages without needing to handle hosting, management, or software updates.”

Connectly’s platform integrates with a range of messaging tools, including WhatsApp, Instagram, SMS, and web-based chatbots, allowing brands to create ad campaigns and automate basic customer interactions. The AI, which is fine-tuned based on a retailer’s product catalog and preferences and connected to the brand’s online store, sends messages to customers about price changes, stock availability, and special offers.

Connectly enables brands, especially e-commerce retailers, to customize the text messages their customers receive. It also helps identify which products customers are most interested in and automatically creates audience segments. For example, it can detect when a customer abandons a cart on a brand’s website and follow up with a message offering a discount code or reduced shipping costs.

When asked about data privacy and transparency, Loukakos emphasized that Connectly’s bots always identify themselves and comply with GDPR regulations, allowing users to opt out of receiving messages at any time.

But do people actually want to chat with companies through bots? Surveys suggest many don’t. A recent study found that most people would prefer to wait to speak with a live agent rather than instantly chat with an AI.

Still, for many companies, deploying AI isn’t solely about enhancing customer experiences. It's also about reducing costs. Gartner predicts that contact centers could save up to $80 billion in labor costs over the next two years by using AI, with one in ten customer service interactions expected to be automated by 2026.

Despite competition from other players in the conversational e-commerce space like Attentive, Twilio, Infobip, Bird, Take Blib, and Yalo, Connectly’s technology has attracted a significant number of brands. Loukakos noted that Connectly has over 300 paying customers and expects its revenue to double in 2024 after seeing a fivefold increase last year.

Although he didn’t provide a specific revenue figure, with last year’s revenue at $3.5 million, it’s reasonable to assume Connectly is on track to reach $7 million by the end of this year.

This week, the company received a significant boost with a $20 million Series B funding round led by Chinese retail giant Alibaba, bringing the total amount raised to $37.2 million and valuing the company at around $100 million. Loukakos wouldn’t speculate on future partnerships with Alibaba but described the investment as “profoundly impactful to Connectly’s potential.”

A spokesperson for Alibaba commented, “We aim to partner with innovative companies leading their industries, and Connectly is doing just that with AI-powered conversational commerce.”

Unusual Ventures, Volpe Capital, RX Ventures, and Falabella Ventures also participated in the Series B round. Loukakos mentioned that the new funds would be used to enhance Connectly’s platform and grow its San Francisco-based team from 65 to nearly 80 employees by the end of the year.