Ocurate, a startup that uses artificial intelligence to predict customer longevity for e-commerce companies, took in an oversubscribed starting round of $3.5 million.
Backers in the round include 8-Bit Capital, DCF Capital, Data Community Fund, AIX Ventures, Italmobiliare, Streamlined Ventures and some individual strategic angel investors such as Adam Metzger and Mazen Al-Jubeir.
Tobi Konitzer, founder and CEO of Ocurate, founded the company in July to establish lifelong value as an organizational principle for business-to-consumer companies. Konitzer, who was previously the co-founder and CEO of PredictWise, told BestFitnessBands that the company’s “secret sauce” is a SaaS deep machine learning framework optimized over Ocurate’s own database and customer data that delivers over 90-plus accuracy. % in predicting people’s behavior.
Currently, companies use metrics that they have self-evaluated and often look at cost per click or action and then retention. Konitzer believes that lifetime value is a better prediction of how much profit a customer will bring to the company.
Ocurate’s database started with voter lists and has now collected data from more than 300,000 Americans, he said. It also pulls in data from customers; for example, if you are a Netflix subscriber, the data may include login credentials, telemetry data, and what has been purchased in the past.
“Ocurate’s technology enables our customers to confidently take action on lifelong value at all stages of the lifecycle, significantly impacting our customer’s overall business with a potential increase in gross profit of more than 15%,” Konitzer added. “Lifetime worth should be the thing that rules everything.”
Although Ocurate was founded five months ago, it already works with four clients – with dozens in the pipeline – and has brought in more than $400,000 in annual recurring revenue since launch.
Two of its customers, Wild Earth and eSalon, indicate that they are already getting good insights. Tamim Mourad, co-founder of eSalon, a hair coloring e-commerce site, said the company spent years trying to build its own lifetime value model to better predict but lacked a data science team. With Ocurate, it can now build more accurate predictive models to better target and segment customers, and understand where the company is historically.
Steve Simitzis, chief technology officer of pet food company Wild Earth, said his focus is on retaining customers and reducing churn, but traditional methods of doing this often mean chasing after customers, which is both tedious and expensive.
“What I liked about Ocurate is that they focused on giving a good idea of customers who were likely to drop out so we could pinpoint our efforts,” he said. “For every customer they give you two numbers, probably churn and how persuasive they are.”
Meanwhile, the new funding will enable Ocurate to announce its product to the public in 2022, double its team from seven employees to 14, and further invest in integrations, data science and machine learning capabilities.
Subsequently, the company plans to raise another round in the second quarter of 2023, and Konitzer said Ocurate is on track to have 20 customers by the end of next year.
“At the forefront of making lifelong value usable, we need to demonstrate that we can influence the way it works, but essentially this is who you need to contact at various points, and this is how much money you need to put into this ,” Konitzer said. “We are developing a recommendation system.”