Onton Secures $7.5M to Transform AI-Powered Shopping Beyond Furniture

Onton raises $7.5M to expand its AI-powered shopping site beyond furniture | TechCrunch

Major tech companies aren't just using AI to help you generate or summarize content -- they also want you to use it for shopping. OpenAI, Google, and Amazon have heavily invested in AI assistants that research new product categories for you and suggest the right ones to buy. Startups like Perplexity, Daydream, and Cherry have also built businesses around AI for product discovery. All these efforts have resulted in customers using more AI for shopping. Onton (previously known as Deft), an AI-powered furniture shopping platform, says it has seen its user base grow from 50,000 monthly active users to over 2 million monthly active users, serving millions of searches and image generations. Fueled by this growth, the startup announced today that it has raised $7.5 million in a new funding round led by Footwork, with participation from Liquid 2, Parable Ventures, and 43, among others. This round brings the startup's total funding to approximately $10 million. Using this funding, the company wants to expand into new categories such as apparel and then eventually consumer electronics. The company rebranded from Deft to Onton earlier this year, citing confusion around the original name and difficulty securing a premium domain. Zack Hudson, co-founder of Onton, says that while large language models (LLMs) are good at guessing probable intent, they have not solved many problems in e-commerce. He added that the startup has observed that the average time a consumer takes to make a purchase decision has increased. For its core technology, the company uses what's called neuro-symbolic architecture. Hudson said that with this approach, the company can eliminate the hallucination problems of LLMs and provide better, logical search results. He added that the startup's model can also learn information from the real world that might not necessarily be included in a product description. "Let's say you are looking for furniture that is pet-friendly. Our tools know that if the item has polyester in it, it would be more stain and scratch-resistant, so it would be more pet-friendly. Our tools learn these things through every single search and become smarter at a faster rate," Hudson said. He added that often, when you search for a product that might be called different things on different sites, you don't get great results. The company's AI model takes those scenarios into consideration while presenting results. Onton has added different input methods and features to help people with their short and long-term decisions. You can now upload an image or add a prompt to generate what you want to achieve with your house or office setup, and Onton can find you furniture based on that. Onton also offers an infinite canvas with image generation, where you can add existing images along with the products you find for ideation. You can also add images of your room and ask the tool to furnish it. The company feels that rather than stick to a chat-only approach, these features will give consumers more options to get to what they want, even if they don't know how to describe it perfectly. The startup said that with these approaches, it has been able to convert customers 3-5x more than traditional e-commerce sites, as they can trust the underlying data. Hudson noted that because of the technological and interface changes it made, it will be easier to launch apparel. The company is building its catalog for the category and plans to launch the vertical soon. In this category, it will face competition from companies like Daydream, Aesthetic, and Style.ai. The company has grown from three full-time employees in 2023 to 10 now, with plans to expand the team to 15 people by hiring engineers and researchers.

Onton Raises $7.5 Million to Power AI eCommerce Searches | PYMNTS.com

By completing this form, you agree to receive marketing communications from PYMNTS and to the sharing of your information with our sponsor, if applicable, in accordance with our Privacy Policy and Terms and Conditions. The new financing, announced Wednesday (Nov. 26), will be used to expand the company's product, team and footprint amid what Onton said is growing demand for AI search. "Shopping has quietly become one of the hardest problems on the internet," the company said in a news release. "People spend a collective lifetime moving between tabs, filtering through over-SEO'd listings, comparing conflicting reviews, and trying to work out what is real and what is marketing. The average person takes 79 days to make a single purchase decision, and the number is growing." Onton said it works to "reset this experience" by making every decision as informed as speaking with an expert and as simple as consulting with a friend. Existing search engines, the release added, depend on keyword matching, "outdated filters," or advertising incentives that deprioritize relevance. Onton said it melds a new interface with a novel neurosymbolic AI foundation that learns more about the world with each search, increasing accuracy and letting people move from discovery to decision in minutes. "We are building the future of decision making online," said Zach Hudson, Onton's co-founder and CEO. "People deserve a way to shop that feels intelligent, transparent, and effortless. Onton is designed to remove the friction that slows everyone down and to give users absolute confidence in their choices." Onton's funding comes ahead of a holiday shopping season in which AI is expected to play a large role. As PYMNTS wrote this week, Bank of America Securities forecasts that ChatGPT will handle roughly 20 billion shopping-related messages this year, highlighting how deeply AI is embedded in eCommerce. "Last year's holiday season saw global retail sales surge to $1.2 trillion, including $282 billion in the United States, as AI chatbot and agent engagement jumped 42%," that report said. "But the same systems fueling that growth are melding discovery and checkout into a single step, widening exposure to fraud, chargebacks and questions of consumer trust. Those pressures will shape this holiday season." With OpenAI's Instant Checkout now live, conversational platforms are turning into marketplaces. The shift is reducing the distance between finding a product and buying it. "AI agents are fast becoming the new gatekeepers of commerce, shrinking discovery from thousands of listings to a handful of curated options and collapsing checkout into a single click," PYMNTS wrote earlier this year.