SAN FRANCISCO — June 17, 2024
In a significant move that underscores the growing importance of artificial intelligence in the ecommerce sector, Constructor, the leading AI-powered product discovery and search platform for enterprise ecommerce companies, has announced the successful closure of a $25 million Series B funding round. This latest investment catapults the company’s valuation to an impressive $550 million, nearly tripling its value since its Series A round in 2021.
A New Chapter in AI-Driven Ecommerce Solutions
The oversubscribed Series B round, led by Sapphire Ventures with participation from existing investor Silversmith Capital Partners, brings Constructor’s total funds raised to date to over $85 million. This substantial influx of capital comes at a time when Constructor was not actively seeking funding, highlighting the strong investor confidence in the company’s vision and potential.
Eli Finkelshteyn, CEO and Co-founder of Constructor, expressed his enthusiasm about the funding: “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.”
Unprecedented Growth and Market Penetration
Constructor’s journey to this funding milestone has been marked by exceptional growth and market penetration. The company has consistently doubled its revenue for three consecutive years, a testament to the increasing demand for advanced AI-powered ecommerce solutions.
The chart above illustrates Constructor’s impressive growth metrics, showcasing the company’s revenue growth, customer base increase, and headcount expansion over the past year.
Key Performance Indicators
- Doubled revenue for the third consecutive year
- 50% increase in overall customer base
- 45% increase in headcount
- Powered over 100 billion shopper interactions in the past six months
- Maintained an average 98.5% client retention rate over the last three years
These figures underscore Constructor’s strong market position and its ability to deliver value to some of the world’s biggest ecommerce players, including Under Armour, Petco, Sephora, Birkenstock, and Target Australia.
Revolutionizing Product Discovery with AI
Constructor’s success lies in its innovative approach to product discovery. By leveraging various AI technologies, including advanced algorithms, machine learning, large language models, and natural language processing, Constructor has set a new standard in personalized ecommerce experiences.
Rajeev Dham, Partner at Sapphire Ventures and newly appointed Board Director at Constructor, commented on the company’s unique position in the market: “With more than a decade of experience in the field, Eli and the team at Constructor have developed a state-of-the-art, AI e-commerce search engine that has delivered best-in-class ROI for many household enterprise brands.”
The AI Shopping Assistant: A Game-Changer
One of Constructor’s most notable innovations is the AI Shopping Assistant (ASA), an award-winning conversational product discovery tool. By blending generative AI with Constructor’s personalization technology, ASA represents a significant leap forward in creating intuitive and highly personalized shopping experiences.
Driving Tangible Results for Ecommerce Giants
Constructor’s impact on its clients’ bottom lines has been substantial. Customers have reported impressive results, including:
- 16.5% increase in average order value
- 247% increase in revenue per visit
- 13% increase in search conversions
- 92% increase in recommendations conversions
- $40 million increase in revenue for some clients
- Greater than 20x ROI
These metrics demonstrate the tangible value that Constructor brings to its clients, helping them optimize their ecommerce operations and drive significant revenue growth.
Petco’s Success Story
Leading pet health and wellness retailer Petco is a prime example of Constructor’s impact. After implementing Constructor’s solutions across its website and mobile app, Petco saw a 13% increase in ecommerce conversions and a 4% increase in site-wide revenue.
Tony Gabriele, Vice President of Digital Strategy at Petco, shared his experience: “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.”
International Expansion and Future Prospects
With the new funding, Constructor is poised for significant international expansion, particularly across Europe, the Middle East, and Africa (EMEA). The company has already tripled its revenue in the EMEA region since 2022 and increased its customer-facing headcount by 133% in the past year.
Eli Finkelshteyn outlined the company’s vision for the future: “We’re extremely excited to build out more ecommerce functionality and expand to additional geographies — driving more value for our customers around the world.”
The Road Ahead: Shaping the Future of Ecommerce
As Constructor continues to innovate and expand, the company is well-positioned to shape the future of ecommerce. By focusing on AI-driven solutions that optimize for key metrics like revenue, conversion rate, and profit, Constructor is helping ecommerce companies transform their product discovery processes and deliver exceptional shopping experiences.
Sri Rao, General Partner at Silversmith Capital Partners, summed up the company’s potential: “AI-first companies like Constructor are leading a shift in software away from simply offering workflow management, towards delivering business results.”
As the ecommerce landscape continues to evolve, Constructor’s AI-powered solutions are set to play an increasingly crucial role in helping businesses navigate the complexities of online retail and drive sustainable growth.
About Constructor
Constructor is the only product discovery and search platform tailor-made for enterprise ecommerce where conversions matter. Constructor’s cloud-based solutions use natural language processing, machine learning-enhanced results ranking and collaborative personalization to deliver powerful user experiences across all facets of product discovery. Optimizing specifically for ecommerce metrics like revenue, conversion rate and profit, Constructor generates consistent $10M+ lifts for some of the biggest brands in B2C and B2B ecommerce, such as Sephora, Petco, Birkenstock, The Very Group, home24, Bonobos and Fisheries Supply. Constructor is a U.S.-based company that was founded in 2015 by Eli Finkelshteyn and Dan McCormick. For more, visit: constructor.io.
About Sapphire Ventures
Sapphire is a global software venture capital firm with more than $10 billion in AUM and team members across Austin, London, Menlo Park and San Francisco. For over a decade, Sapphire has partnered with visionary management teams and venture funds to back companies of consequence. Since its founding, Sapphire has invested in more than 170 companies globally, resulting in more than 30 Public Listings and 45 acquisitions. The firm’s investment strategies — Sapphire Ventures, Sapphire Partners, and Sapphire Sport — are focused on scaling companies and venture funds, elevating them to become category leaders. Sapphire’s Portfolio Growth team of experienced operators delivers a strategic blend of value-added services, tools, and resources designed to support portfolio company leaders as they scale.
About Silversmith Capital Partners
Founded in 2015, Silversmith Capital Partners is a Boston-based growth equity firm with $3.3 billion of capital under management. Silversmith’s mission is to partner with and support the best entrepreneurs in growing, profitable technology and healthcare companies. Representative investments include ActiveCampaign, Appfire, Apryse, DistroKid, impact.com, Iodine Software, LifeStance Health, Onbe, and Webflow. For more information, including a full list of portfolio investments, visit www.silversmith.com or follow the firm on LinkedIn.
