Our Seed Investment in LimeChat: AI Chatbot for Conversational Commerce
Imagine you are browsing for a skincare supplement on a D2C brand website. There are multiple options available and each one of them has a different use case and consequently, different ingredients, side effects, usage etc. If you are like me, you probably end up confused delaying the purchase while you do your research.
Chances are that most of us have messaged a business in the last 30 days to make a purchase or inquire about a product - a recent survey by Facebook showed 75%+ customers across the world have reached out to a business account across all their assets.
So, why is the buying behavior shifting from search-based on websites and apps to interactive buying on messaging platforms? For one, 4.3 billion people are already using messaging apps and over 20 billion messages are already exchanged between businesses and consumers on FB Messenger alone. In addition, consumers increasingly value convenience of faster response times, 24*7 availability and more personalized experiences. In a recent survey, 80% of consumers claimed that they are even willing to pay more for the convenience and experience.
As a result, these conversational commerce experiences often combine people's favourite parts of shopping in store (e.g. consulting with a salesperson) and their favourite parts of shopping online (e.g. the convenience of shopping whenever they want).
And why should brands care about this tectonic shift? Higher spending, higher conversion rates, higher retention and loyalty, and lower customer acquisition cost. 70%+ customers across geographies spend more with brands due to personalized and emotional engagement. Messaging has a 75% open rate which is 45 times higher than email and nearly three times higher than push notifications. Over two-thirds of customers feel more confident about the brand if they are able to get a personalized experience on chat.
As brands deal with an exponential number of messages now hitting them, clearly this problem can not be solved by employing more humans. That will not scale, will be cost prohibitive for brands and also lead to a broken experience for consumers. Enter a Level 3 Artificial Intelligence based chatbot which will replicate human agents in terms of understanding language and context, scale massively with little learning and learn about the consumer to provide a more personalized experience.
At pi, we are always looking for disruptive use cases of AI and realized that a sophisticated chatbot that could automate the conversations between brands and their customers while retaining the personal and natural communication aspect craved by customers could be the panacea. This problem-solution fit perfectly with our thesis of solving massive global business problems on the back of disruptive technology creating 10x differentiated businesses.
We meet quite a few chatbot companies and all too often, these companies end up delivering a very mechanical and static experience thereby driving customers away. So when we met LimeChat for the first time, we were blown away by the sophistication of the NLP engine developed by Nikhil and Aniket and seamless interactions during the entire user journey. However, they were not looking to raise at that moment and we stayed in touch, regularly brainstorming about their vision and product. When the opportunity arose to join them as they build and scale, we jumped at it and were ecstatic they chose us.
So what is special about them and why are we so excited? Their Level 3 Conversational AI chatbot enables direct-to-consumer (D2C) brands to drive up online sales conversations across chat mediums like WhatsApp, FB Messenger, and Instagram. This new generation of conversational technology has empowered brands to expand chat as a revenue channel with increased Customer Satisfaction (CSAT) and reduced Cost-per-Conversion (CPC). They achieve this by identifying language, sentiment and intent to deliver personalised and contextual conversational experiences to customers.
With integration across CRMs, store management platforms, payments networks, and logistics platforms, their product provides an end-to-end seamless experience to its clients. In addition, their analytics engine delivers granular business intelligence to brands and helps drive higher ROI on marketing and retargeting campaigns.
LimeChat’s AI engine combined with deep integrations within customer workflows and analytics has created a very differentiated positioning in the market as an upselling engine (Revenue generator) rather than customer support (Cost saver).
What does this mean for brands and how does this benefit them? Even at this early stage, LimeChat has been able to drive 20% sales conversion rate for its clients via its personalised automated conversational commerce platform as compared to the typical 2-3% conversion rate on the websites resulting in a 10x improvement. Besides this, by leveraging its highly sophisticated AI engine, LimeChat has been able to automate upto 80% of support tickets for brands as compared to the industry standard of 40%.
The latest trends show that the single biggest impact on conversion is not products or prices but, instead, it’s the positive customer experience a brand delivers. LimeChat enables this for brands effortlessly and 25+ leading D2C brands including The Man Company, Kapiva, Man Matters will attest to it.
Nikhil and Aniket are 2 of the sharpest minds we have ever met and their grand vision of being the default enabler for conversational commerce belies their young age. They have executed exceptionally and we are proud to partner with them on this journey with pi Ventures co-leading the transaction along with Stellaris Venture Partners. The round was strengthened with the participation of some fantastic angels which include Kalyan Krishnamurthy, Sujeet Kumar, Ramakant Sharma, Dilip Khandelwal and others who bring a ton of expertise to the table.
With over 100M business accounts already present across WhatsApp and FB Messenger and COVID induced increased digital buying from D2C brands, the conversational commerce market is just getting warmed up and we strongly believe LimeChat will be at the forefront of this revolution.