Wizard Raises $50M Series A for Conversational Commerce | TechCrunch

Marc Lore Invests in Conversational Commerce Startup, Wizard

Marc Lore, formerly the U.S. e-commerce head at Walmart, is now supporting a new venture in the e-commerce sector known as Wizard. Lore assumes the positions of co-founder, chairman of the board, and investor within Wizard, a B2B startup focused on “conversational commerce.”

Series A Funding

Prior to its public launch, Wizard has secured $50 million in Series A funding, spearheaded by Tony Florence of NEA. Both Lore and Accel participated in this funding round. Florence, Lore, and Sameer Gandhi from Accel will hold board positions alongside Wizard’s co-founder and CEO, Melissa Bridgeford.

The Origins of Wizard

The company’s beginnings are somewhat unconventional. Melissa Bridgeford previously founded and operated Stylust, an Austin-based platform offering text-based shopping assistance to consumers.

Stylust: A Precursor to Wizard

Stylust allowed users to send screenshots and photos via text to receive product recommendations, completing purchases directly through text messaging, bypassing traditional websites. Utilizing AI and image recognition, Stylust provided tailored shopping options. A B2B aspect of Stylust promised brands a streamlined “one-text checkout” process, reportedly achieving a 35% conversion rate – ten times greater than web-based commerce.

Acquisition and Team Transition

Wizard describes its relationship with Stylust as an “acquisition,” though the vast majority of the team are former Stylust employees. At the time of the acquisition, Wizard did not yet have a functioning product in the market.

Leveraging Experience and Investment

This effectively positions Wizard as a new company, benefiting from Lore’s extensive e-commerce expertise and the backing of prominent investors.

Vision for the Future of Retail

Bridgeford characterizes Wizard as an opportunity “to expand our vision on a larger scale and collaborate with Marc, a true visionary in retail technology, and a proven leader.” She further emphasizes, “We share the belief that conversational commerce represents the future of retail.”

The Wizard Service

Currently, the company is not disclosing specific product details. However, it describes its B2B service as enabling brands and retailers to conduct transactions with customers via text messaging. This service aims to provide a complete “end-to-end shopping experience” on mobile, encompassing opt-in, search, payments, shipping, and reordering.

A Human-Centered Approach

Bridgeford asserts that these text-based interactions will differ significantly from the often-frustrating experiences with messaging app chatbots. The company aims to blend automation with a human touch to deliver an optimal user experience.

Technology and Scalability

“The goal is to create a system that feels like a conversation with a real person, powered by technology,” Bridgeford explains. She notes that advancements in chat abilities and natural language processing are rapidly evolving.

Existing Brand Relationships

Stylust’s established brand relationships have transferred to Wizard. Previous clients included Laughing Glass Cocktails, Desolas Mezcal, Pinhook Bourbon, Marsh House Rum, and Neft Vodkas, with a particular focus on wine and spirits retail. Earlier connections also encompassed major retailers like Neiman Marcus, Walmart, Sephora, and Allbirds.

Future Business Focus

It remains uncertain which relationships will continue under Wizard’s direction, or whether the focus will remain on alcohol brands or expand to other retailers, as the company is currently withholding details regarding its business strategy.

Strategic Hiring Plans

The funding will be allocated to hiring talent in areas such as AI, machine learning, and natural language processing, as well as non-technical roles in sales, finance, and operations. A key position the company is seeking to fill is a chief people officer.

Remote Work and Office Locations

While the current team operates from offices in New York and Austin, Wizard is embracing a nationwide remote hiring strategy for its technology team.

Competitive Landscape

Wizard faces competition from existing services addressing aspects of its business, particularly in text marketing. However, broader trends in messaging-based brand interaction, such as product discovery on social media and subsequent inquiries via Messenger or DMs, also present potential evolutionary pathways for competitors. Platforms like WhatsApp and Apple’s Business Chat are also developing similar functionalities.

The Advantage of SMS

Wizard’s emphasis on SMS, rather than requiring a dedicated messaging app, could provide a competitive advantage. However, relying on SMS carries risks due to its increasing prevalence as a channel for spam and scams.

Lore’s Confidence in Conversational Commerce

“Throughout my career in e-commerce, it’s become clear that conversational commerce is the future of retail,” stated Lore. “With the increasing power of deep learning, the ability to create a highly personalized, conversational shopping experience will fundamentally change how people shop, and I am confident that Melissa and the Wizard team are poised to lead this transformation.”

Correction, 10/6/21 10:12 AM ET: The name of Bridgeford’s prior company was Stylust, not Stylelust. We have corrected this.