Shopping cart abandonment -- when a person shopping online moves away from a site or mobile app before completing a sale -- remains one of the biggest hurdles to e-commerce, with some 70% of all visits with an intention to buy never resulting in actual transactions.
Now, a startup called Zycada is emerging from stealth to help address that, with bot-based technology that speeds up how quickly the interactive elements load up on e-commerce sites. In turn, online retailers -- which number somewhere between 12 million and 24 million sites globally -- can have sites that work as well or even faster than Amazon, the quintessential bull in the e-commerce shop.
In addition to coming out of stealth today, it's announcing $19 million in funding and a new CEO, James Brear, to grow the business.
The round is being led by Kholsa Ventures, with Cervin Venturers and Nordic Eye Venture Capital also participating. Prior to today, according to PitchBook data, it looks like the company had raised just under $11 million in early stage funding, and it's not disclosing its valuation.
But as is the case with a lot of B2B companies, Zycada has not been sitting idle while in stealth: the company has already picked up a number of very large customers, including one of the world's very biggest retailers (which wishes to keep its name out of this story). These businesses are using the technology to speed up their sites, and specifically the interactive elements on their pages such as "buy" buttons. Those large customers are likely one reason it's raised so much money while still in stealth.
The issue that Zycada is tackling is one particular niche of web content delivery called Time to Interactive (TTI).
The idea is that a typical webpage involves a complicated mix of activities and purposes being handled and loaded by content delivery networks, and each of those don't necessarily work in concert with the others.
They range from images, advertisements and interactive buttons through to cookies, analytics and many things that a consumer doesn't "see" but are used by the company to improve what they are providing and to amass data for future activities.
Obviously, in an ideal world all of this would be coming online in the blink of an eye, but realistically what is more often the case is that some of the most critical elements find themselves "queuing" behind others to appear and work for a typical user.
And it turns out that typical users have very little patience online. "Buy Now" really does mean "now". So when something critical like interactive buttons don't appear or don't work for a moment or more, shoppers move on and the site loses a sale. The worry is that losing a sale really is losing: Zycada estimates that e-commerce sales will be worth some $7 trillion by 2024, from $3.5 trillion in 2018. But with world events like global health pandemics pushing people to shop virtually, if one site doesn't work well, a shopper will simply navigate to another that works better.
As Subbu Varadarajan, the CPO (who served as CEO before Brear came on board) who co-founded the company with Roy Antonyraj (who is the CTO), describes it, Zycada's bot technology essentially acts as a way to prioritise interactive elements, with the understanding that these are the first that a user will want to have appear and working when typically visiting a site.
He claims that using Zycada's bots can speed up the TTI to 10 times faster than Amazon typically offers on its pages. (Amazon is a huge benchmark in this area for all online retailers, but especially the biggest in the world, which see it as their key rival and disruptor.) In terms of actual numbers, he said that Amazon typically takes 1.35 seconds to load its interactive content, while Zycada shortens that to milliseconds. The "long" wait typical e-commerce sites have without this kind of acceleration, of more than three seconds, can result in 57% of shoppers abandoning a purchase. "And that's not all," he added. "The get frustrated and tell their friends."
Of course, TTI is only one part of the mix for why one site will "work" and convert sales. Others include what stock a company has, how long it takes to deliver something, how much the product costs, how easy it is to pay for it, and more -- all problems that underscore just how fragmented the e-commerce market is, and how complicated it can be.
So it's interesting that longer term the plan will be to apply this technology to more than just e-commerce, according to Brear, who noted that other sectors like media could also benefit from Zycada bots to speed up how users can respond and click around a page.
It's an interesting problem and while today the focus is on "how to be better than Amazon," when and if Zycada expands to other areas like online news, for example, it will throw up other kinds of rivals. Google, for example, has been trying to "fix" load times for news and other kinds of sites with an approach it developed called AMP, but many in the industry don't like the idea of working with it and essentially handing over traffic to the search giant in exchange for faster performance.
In that regard, Zycada could potentially one day offer an alternative.
“Modern consumers and mobile app users are sophisticated and demand experiences that are responsive, regardless of the content,” said Preetish Nijhawan, Managing Partner at Cervin Ventures and co-Founder of Akamai Technologies, in a statement. “Zycada is changing the game, and creating a new standard for high performance delivery of rich, dynamic experiences.” Nijhawan is joining the board of the startup with this round.