E-commerce AI startup Loops raises $3.5M to create smoother online shopping experiences

E-commerce AI startup Loops raises $3.5M to create smoother online shopping experiences

Agentic e-commerce startup Loops Smart AI wants to help online retailers create more seamless buying journeys and streamline the shopping experience after raising $3.5 million in seed funding today.

Andreessen Horowitz’s a16z speedrun accelerator led the round, with NTT Docomo, Connecticut Innovations, Alumni Ventures and Monday Capital all participating.

These days, most online retailers have adopted artificial intelligence tools in some way or another, but the way they’re doing it, by adding one feature at a time, is the wrong way to go about it, said Loops co-founder and Chief Executive Ari Nazir (pictured, left). All it leads to, he says, is fragmentation and disconnected experiences.

For instance, a retailer might add one AI tool to help with product searches, and a separate chatbot for answering customer’s questions, then another for generating product descriptions, followed by another to enable virtual try-ons. Nazir said these AI tools are all useful on their own, but the problem is they’re running in siloes, so they only understand a small piece of the overall customer journey. This means retailers have to find a way to stitch them altogether if they want to be more helpful and actually surface the ideal product for each customer.

Nazir said he and his co-founder İlker Selim Zorluoğlu (right) experienced this disconnect for themselves while on vacation in Bali a couple of years ago. At the time, Zorluoğlu was trying to purchase a gift online for his two-year-old daughter, Nazir said, but he needed to ask a couple of questions about the product. He messaged the retailer several times across different channels, but never received a reply, and ultimately decided against buying the product in question.

“We started investigating why something so simple was still so difficult,” Nazir explained. “What we found was a much bigger problem than unanswered messages: Retailers lacked the infrastructure to operate in an AI-driven world. Consumers were becoming comfortable with asking AI questions in natural language, but online shopping still depended on dropdown menus, keyword searches and disconnected customer-service queues.”

Nazir and Zorluoğlu decided to see if they can fix this disconnected experience, and the solution they came up with was a single, unified AI layer that can understand a retailer’s entire product catalog, ingest its business context and then follow each shopper’s intent from initial discovery all the way through to the end purchase.

Looping it all together

To enable this smooth customer journey, Loops relies on five core components, including an AI search and product discovery tool that makes it simple for people to search for products in natural language, and a shopping assistant that can answer their questions in real time. Under the hood, there’s a product enrichment tool for cleaning up and standardizing the data inside retailer’s product catalogs, so they’re readable by both humans and AI. Finally, Loops offers a virtual try-on tool for shoppers to visualize how products will look if they’re wearing them.

By offering these capabilities within a single system, Loops can track the shopper’s journey from the moment they first land on the retailer’s platform. Shoppers can describe what they’re looking for, and if they have questions at any stage while they’re browsing through different product suggestions, it’ll provide the answers immediately, drawing on the enriched product catalog data.

“Our approach brings these capabilities together into a holistic solution built around each business’s products, knowledge and customer journey,” Nazir explained. “Better product information supports better search; better discovery supports more useful shopping conversations; and those interactions reveal opportunities to improve the experience further.”

Nazir said Loops has already transformed the shopping experience for more than 70 online retailers, which have deployed its platform to enhance millions of customer journeys already. One of its biggest customers is the Turkish supermarket chain A101, which increased its customer conversion rate by an impressive 83% after integrating Loops’ AI tools. The coffee retailer Tchibo benefited to the tune of 13.6% higher average order values.

The fashion retailer Mavi has completely reinvented its shopping experience. Instead of consumers entering keywords or searching through category lists, they can simply tell its AI concierge what they’re looking for by describing an occasion, a style or a particular type of fit.

“We want our customers to buy a business capability that they can depend on, rather than assemble and maintain that capability by themselves,” Nazir said.

The funds from today’s round will help Loops to scale up its platform globally, but in the longer term, Loops believes that its connected customer journeys can also be beneficial in other industries besides online retail. That’s why it has plans to expand into sectors such as financial services and energy, weaving disconnected workflows into a streamlined, end-to-end experience.

“Commerce is our starting point,” Nazir said. “But the larger ambition is to help companies become AI native: where AI becomes part of how work gets done, rather than an isolated feature added to existing software.”

Fareed Mosavat of a16z Speedrun said it’s this grand ambition that most attracted him to Loops, along with the fact it has already shown it can work reliably inside real businesses. “Loops is starting in commerce, where the link between a better AI experience and business value is unusually clear,” he said. “Its pilot conversion and early customer expansion shows that brands want a platform that can own more of that journey.”

Photo: Loops AI