Constructor raises USD $25 million to triple valuation to USD $550 million

Constructor, an AI-powered product discovery and search platform for enterprise eCommerce companies has announced the completion of its Series B funding round, securing USD $25 million. This latest round of funding has nearly tripled the company's valuation to USD $550 million since its Series A round in 2021, with the total funds raised to date surpassing USD $85 million. The funding round was led by Sapphire Ventures, with continued support from Silversmith Capital Partners, an existing investor.

The new capital will be directed towards bolstering product development and innovation, alongside furthering the company's international expansion efforts. In particular, Constructor plans to apply its advanced, clickstream-based AI technology to enhance eCommerce product discovery, driving more personalised and effective shopping experiences. This funding round follows a period of significant growth and operational success for the company.

Highlights of the company's recent achievements include a consistent revenue doubling for the past three years, powering over 100 billion shopper interactions in the last six months, and increasing its overall customer base by 50% in the previous year. Notably, Constructor has maintained an average client retention rate of 98.5% over the past three years.

Rajeev Dham, Partner at Sapphire Ventures, who is set to join Constructor's board of directors, commented on the importance of the investment: "In today's competitive e-commerce environment, having a powerful AI search solution that can best capture shopper intent is crucial to driving topline revenues. With more than a decade of experience in the field, Eli [Finkelshteyn] 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. We are incredibly excited to partner with the team as they set a new standard in powering a hyper-personalised shopper experience."

Eli Finkelshteyn, CEO and Co-founder of Constructor shared his perspective on the recent funding and the company's mission: "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. We started Constructor off with what, at the time, seemed like a crazy idea to most of our industry: that learning shoppers' preferences via AI can give them a far better search and product discovery experience than simply matching on the keywords they type. Our success will always be a symptom and function of theirs. And through our partnerships with Sapphire Ventures and Silversmith Capital Partners, we're extremely excited to build out more eCommerce functionality and expand to additional geographies."

The company has demonstrated the impact of its technology through various case studies. For example, Petco, a leader in pet health and wellness retail, recently adopted Constructor's platform to personalise search results, browse experiences, product recommendations, and landing pages across its website and mobile app. This move resulted in a 13% increase in eCommerce conversions and a 4% boost in site-wide revenue.

Tony Gabriele, Vice President of Digital Strategy at Petco, remarked on their choice of Constructor: "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—and when we have questions, the Constructor team is always happy to talk us through it. We evaluated every vendor on the market, and Constructor was just different. The system is easy to use, the team is motivated and delightful to work with, and most importantly, it paid for itself plus the cost of switching in less than a year after we implemented it."

According to a Forrester blog, improving product discovery is one of the most effective ways to positively impact digital metrics with a clear and attributable return on investment. Constructor's platform has been recognised for its strategic importance in this domain, recently earning the highest rank in the strategy category in The Forrester Wave: Commerce Search And Product Discovery for Q3 2023.

Silversmith General Partner Sri Rao also added: "AI-first companies like Constructor are leading a shift in software away from simply offering workflow management towards delivering business results. We are encouraged by the company's ability to maintain its dedication to innovation and customer success while navigating rapid growth since our initial investment, and are excited to both expand our commitment as well as welcome Sapphire Ventures as Constructor enters the next phase of growth."