Constructor, a leading AI-powered product discovery and search platform for enterprise e-commerce companies, announced that it has closed a $25 million Series B round. This funding round brought the company’s valuation to $550 million. Sapphire Ventures led the round with participation from existing investor Silversmith Capital Partners.
With this new funding round, Constructor will continue to accelerate product development and innovation and apply the clickstream-based AI it pioneered to further improve e-commerce product discovery and continue its rapid international expansion.
This is a nearly triple the valuation since the 2021 Series A and it brings total funds raised to date to over $85 million.
The oversubscribed Series B funding round comes at a time when Constructor was not actively fundraising. And the new funding round also caps off record-setting growth and momentum for the company with proof points of recent success, including
1.) Doubled revenue for the third year in a row.
2.) Powered over 100 billion shopper interactions over the past six months, enabling some of the world’s biggest businesses to drive hundreds of millions of personalized experiences every day.
3.) Increased headcount by 45% over the past year.
4.) Increased overall customer base by 50% over the past year. Leading e-commerce companies and household names, including Under Armour, Petco, Sephora, Birkenstock, Target Australia etc. use Constructor’s AI to improve how buyers search for and discover the best items for them.
5.) Maintained an average 98.5% client retention rate over the last three years, by far the highest in the industry.
6.) Launched AI Shopping Assistant (ASA), a conversational product discovery tool blending generative AI with Constructor’s personalization technology.
7.) Expanded internationally, especially across Europe, the Middle East and Africa (EMEA), where it has tripled revenue since 2022 and increased customer-facing headcount by 133% since the beginning of this year.
Constructor is now well-positioned to continue a relentless pace of product innovation, helping customers apply multiple types of AI such as advanced algorithms, machine learning, large language models, transformers, natural language processing, generative AI, etc. to improve product discovery while optimizing for e-commerce metrics that matter.
Customers have been seeing positive results, including a 16.5% increase in average order value, 247% increase in revenue per visit, 13% increase in search conversions, 92% increase in recommendations conversions, a $40 million increase in revenue, greater than 20 times ROI, etc.
Pet health and wellness retailer Petco recently turned to Constructor to power and personalize search results, browse experiences, product recommendations and landing pages across its website and mobile app — which drove a 13% increase in ecommerce conversions and 4% increase in site-wide revenue.
KEY QUOTES:
“In today’s competitive ecommerce environment, having a powerful AI search solution that can best capture shopper intent is crucial to driving topline revenues — yet until now, existing tech has remained rudimentary. With more than a decade of experience in the field, Eli and the team at Constructor have developed a state-of-the-art, AI ecommerce search engine that has delivered best-in-class ROI for many household enterprise brands. We are incredibly excited to partner with the team as they set a new standard in powering a hyper-personalized shopper experience.”
- Rajeev Dham, Partner at Sapphire Ventures, who will be joining as a Board Director
“We’re very proud of this fundraise, but it’s important for us to remember that it’s only a symptom of doing good work for our customers. If we don’t use this to do better for them, then we’re missing the point. We started Constructor off with what, at the time, seemed like a crazy idea to most of our industry: that learning shoppers’ preferences via AI can give them a far better search and product discovery experience than simply matching on the keywords they type. We believe putting AI at the core of our system from the beginning has played a large role in the successes we’ve been able to bring our customers — but also believe there’s always room to serve them better, and that’s the main thing we want to use this investment for. Our success will always be a symptom and function of theirs. And through our partnerships with Sapphire Ventures and Silversmith Capital Partners, we’re extremely excited to build out more ecommerce functionality and expand to additional geographies — driving more value for our customers around the world.”
- Eli Finkelshteyn, CEO and Co-founder of Constructor
“The thing we liked about Constructor was that not only was it real AI, specifically made for our industry, but that their AI is incredibly transparent. None of it is black box – so we don’t have to guess what it’s doing or why – and when we have questions, the Constructor team is always happy to talk us through it. We evaluated every vendor on the market, and Constructor was just different. The system is easy to use, the team is motivated and delightful to work with, and most importantly, it paid for itself plus the cost of switching in less than a year after we implemented it.”
- Tony Gabriele, Vice President of Digital Strategy, Petco
“AI-first companies like Constructor are leading a shift in software away from simply offering workflow management, towards delivering business results. We are encouraged by the company’s ability to maintain its dedication to innovation and customer success while navigating rapid growth since our initial investment, and are excited to both expand our commitment as well as welcome Sapphire Ventures as Constructor enters the next phase of growth.”
- Silversmith General Partner Sri Rao
