Recart to receive USD 3.5 mln investment
Recart's management team. From left to right: István Kovács, CTO; Juli Sz. Kis, head of product; Soma Tóth, CEO; and David Tóth, head of operations. Photo by Tamás Welczenbach.
Budapest-based mobile marketing platform Recart is set to receive an investment of USD 3.5 million, including USD 2.5 mln from Enter Tomorrow venture capital fund, managed by Lead Ventures, according to a press release sent to the Budapest Business Journal.
In addition, Oktogon Ventures and Day One Capital will provide USD 250,000 each. The rest will be provided by private investors.
Recart built the first version of its product in 2016 to resolve a significant problem in the world of online shopping, namely that more than three-quarter of purchases are never completed by customers: the process is halted, and the chosen items remain in the basket.
"Most often it does not happen because people lose interest in the product or shopping, but usually some kind of outside factor,” says the company’s founder-CEO Soma Tóth.
According to the press release, Recart was the first in the world to make automated messages available on Facebook Messenger at the end of 2017, to lower the number of abandoned shopping baskets. So far, Recart has generated over USD 200 mln additional revenues for its clients.
Today, Recart assists online stores that are mostly Shopify clients in full marketing automatization, so they can stay in touch with their customers in a more effective way. Based on their proper analysis of real-time behavioral data, interested buyers can be addressed with good hit accuracy in a way that webshops can manage to hold onto them or by, for instance, offering them a personal discount, to earn revenues they otherwise might have lost.
For this, Recart has developed an online marketing platform that automates e-store communication and marketing activities with customers on various message sending platforms, such as Facebook Messenger. Recart has also managed to initiate two-way discussions with customers via SMS, thanks to which customers can receive personalized offers and can ask questions.
"This not only makes it easier to complete a purchase, but also makes data collection more effective and improves customer loyalty,” notes Tóth.
The viability of the technology is illustrated by the fact that while the reach of promotional e-mails shows a continuously declining tendency, Messenger messages can boast 85-90% opening rates and 20% click rates. SMS messages have even better figures, where the rates are 98%, and 40%, respectively.
Since WhatsApp has even more users than Messenger, the solution will become available in this application as well from the third quarter of 2021. According to plans, likely from the beginning of 2022, they will move onto Apple Business Chat and RCS, which is richer than the SMS environment, provided the marketing messages will become available there.
In addition to expanding their American presence, the company will also use the investment amount provided by Enter Tomorrow venture capital fund - created with the participation of MOL and MFB Invest, in which Oktogon Ventures, Day One Capital, and two angel investors also showed interest in 2019 - to double the development team within a few months.
“The pandemic has sped up the penetration of digital purchases in commerce by about five years,” Balázs Haszonics, CFO of Lead Ventures explained regarding the involvement of Enter Tomorrow.
According to Haszonics, without the presence of the virus, e-commerce in the United States would have only reached the USD 840 billion value threshold next year, which has been crossed last year already, due to the well-known circumstances.
The Lead Ventures CFO is confident that similarly to the major changes in e-commerce, tectonic changes can also be expected in the market of message services. According to expert estimates, some 70% of the world's population will have access to mobile technology by 2023.
According to the prognosis of Marketwatch, the chatmarketing market can become a USD 2 bln business by 2025.
Recart is currently the number one message sending option in Shopify App Store: so far, more than 155,000 merchants have used this solution.
SUPPORT THE BUDAPEST BUSINESS JOURNAL
Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.