Karma, an AI shopping assistant and shopping network, announced it has raised $25 Million in Series A funding. It was led by Target Global and MoreTech Ventures with participation by existing investors such as NFX or Altair Capital. Karma lets users plan their next online purchase, receive real-time inventory and price updates, and access coupons to earn cashback.
Ronen Yuval-Hoch and Jonathan Freidman founded the Tel Aviv-based company in 2014. It was created as a bookmarklet tool that allows consumers to save and track their products. Karma has released browser extensions and Android apps since then. Karma now has 60 employees in Tel Aviv, Minsk and Belarus, as well as over 30,000 retail partners like Apple, Nordstrom and Farefetch.
Karma was born out of a simple need. Karma CEO Jonathan Freidman and co-founder told TechCrunch that he knew when something went on sale in his size and color. My wife came up with the idea. One day, my wife came up to us and asked: Why isn't this process automated?" He said that we started with knowing when prices change and automating it for users.
Karma today has three main functions. First, users can create shopping lists that allow them to save products for later. Karma will notify the user when there is a price change, or if a product comes back in stock. This function helps users plan and streamline their purchases.
The service searches the internet for coupons automatically at checkout. This is similar to PayPal's Honey service. Friedman was asked about Karma's comparison to Honey. He said that Karma has an automatic coupon-finder similar to Honey but this is only one aspect of Karmas offerings. Karma, Friedman said, is more than Honey in that it guides users through the entire pre-purchase journey and aggregates relevant services. It also surfaces coupons. PayPal's interest in Honey goes beyond securing users. The fintech company targets shoppers with customized deals through its integration into PayPal.
Friedman explained that Karmas' third core function allows users cashback from hundreds of retailers. Karma displays all relevant cashback offers for users at checkout.
These functions are designed to automate large swathes of pre-purchase and help you save time and money. Friedman stated that while we always strive to give our users the best value, it is also important to streamline the user experience. He noted that today, there are many apps available for cashback or coupons, but our app offers all of these in one place.
Friedman announced that Karma will double its workforce with this new round of funding. Karma plans to continue investing heavily in AI and machine-learning and will add new features to the tool. Karma will also be focusing on ways to increase its user base.
Karma currently boasts approximately three million customers and 650,000 monthly active users. Karma's user base has grown between 15% and 20% month-overmonth. Karma users have saved more than $144 million this year.
Friedman said that the majority of our customers are millennials. Next is Gen Z. Because the average order value of our merchant partners is over $100, we have a high-quality audience. We are very strong at the higher end and do not attract the average coupon audience. We appeal to shoppers who want to shop smarter and automate large parts of their shopping experience. He said that no one likes to pay too much so we want to ensure that you don't overpay.
Friedman stated that Karma's future plans are not limited to the pre-purchasing experience for its users, but also look at the possibility of moving into post-purchase and point-of-sale strategies.
Karma, he believes is the largest shopping network in the globe and can be the market leader in automated shopping. Karma plans to enhance users' shopping experience by launching new services and features. Some of these are expected to be launched by the end the year.