Ocurate Raises $3.5M to Predict Customer Lifetime Value

Ocurate Secures $3.5 Million Seed Funding to Revolutionize Customer Lifetime Value Prediction

Ocurate, a company leveraging artificial intelligence to forecast customer lifetime value (CLTV) for e-commerce businesses, has successfully closed an oversubscribed seed funding round totaling $3.5 million.

Investment Details

The funding round saw participation from several prominent investors, including 8-Bit Capital, DCF Capital, Data Community Fund, AIX Ventures, Italmobiliare, and Streamlined Ventures. Additionally, strategic angel investors such as Adam Metzger and Mazen Al-Jubeir contributed to the round.

Company Vision and Technology

Founded in July by Tobi Konitzer, Ocurate aims to establish CLTV as a central organizing principle for business-to-consumer (B2C) companies.

Konitzer, previously the co-founder and CEO of PredictWise, explained that the company’s core strength lies in its SaaS-based, deep machine learning framework. This framework is refined using Ocurate’s unique database and customer data, achieving over 90% accuracy in predicting consumer behavior.

Shifting Focus to Lifetime Value

Currently, many businesses rely on self-evaluated metrics like cost per click or action, alongside retention rates. Konitzer posits that customer lifetime value provides a more reliable indicator of a customer’s potential profitability.

Data Acquisition and Usage

Ocurate’s data collection began with voter rolls and has expanded to encompass data from over 300,000 Americans. The company also integrates data directly from its clients.

For instance, a subscriber to a service like Netflix might contribute data points such as login activity, telemetry information, and past purchase history.

Impact and Potential

“Our technology empowers clients to confidently implement strategies based on lifetime value throughout the entire customer lifecycle,” Konitzer stated. “This can lead to a potential increase in gross profit exceeding 15%.” He emphasized that CLTV should be the guiding factor in all business decisions.

Early Traction and Revenue

Despite being established only five months ago, Ocurate is already collaborating with four clients, with numerous others in the pipeline. The company has generated over $400,000 in annual recurring revenue since its launch.

Client Testimonials

Early adopters, including Wild Earth and eSalon, have reported positive results.

Tamim Mourad, co-founder of eSalon, an online retailer specializing in hair color, noted that the company had previously attempted to develop its own CLTV model without a dedicated data science team. Ocurate now enables them to create more precise predictive models for improved client targeting and segmentation, and a better understanding of historical performance.

Steve Simitzis, chief technology officer at pet food company Wild Earth, highlighted the importance of customer retention and churn reduction. He found traditional methods of addressing these issues to be intrusive and costly.

“Ocurate’s approach focuses on identifying customers at risk of churn, allowing us to concentrate our efforts effectively,” Simitzis explained. “The platform provides two key metrics for each customer: the likelihood of churn and their susceptibility to persuasion.”

Future Plans

The newly acquired funding will be used to publicly release the product in 2022, expand the team from seven to fourteen employees, and further invest in data science, machine learning, and integrations.

Ocurate plans to secure another funding round in the second quarter of 2023, with a goal of reaching 20 customers by the end of the following year.

“We aim to demonstrate how we can influence CLTV by providing actionable recommendations – identifying who to contact at specific times and how much investment to allocate,” Konitzer concluded. “We are actively developing a robust recommendation system.”