CEO Victor Rosenman and CTO Eyal Lanxner
Oryzn Capital, Square Peg Capital, JAL Ventures Fund, Viola Credit
Anyone visiting the ecommerce websites of Amazon, eBay, or AliExpress can easily see that different sellers are offering the same merchandise at different prices. One seller offers the same keychain only in blue, another offers a variety of colors and a third offers it at a higher price, but with low delivery charges. Are these decisions random? Far from it. They are highly calculated, and more and more of them are made using the technology of Israeli startup Feedvisor.
Feedvisor CEO Victor Rosenman, one of the company’s two cofounders, explains: "Ecommerce is an exciting and constantly changing world. In recent years, an important process has been taking place in it: a switch from isolated and differentiated sales websites to selling through trading platforms like Amazon and eBay. They have changed the world."
In this area, progress is coming to Israel slowly. "There are no such platforms in Israel," Rosenman says. "There are price comparison and recommendations sites, but, in the end, the purchase is from a particular website. By contrast, Amazon, for example, is much more than just an intermediary. Your deal is actually with Amazon, which itself does the transaction with the seller, thereby effectively giving you insurance on your purchase.
"Because of the ease and reliability of making an order, sending returns, and canceling deals with Amazon, the global shopping market, especially in the US, has completely changed. Today, every fourth purchase is through Amazon. I have felt this myself since I moved to the US in order to manage our activity there. In the lobby of every residential building, the security guard's station is full of Amazon packages waiting for the people who ordered them to pick them up."
Feedvisor was founded in order to help retailers price their products correctly in order to maximize their profits. It has developed a machine learning system that can estimate the effect of a price change on profit. Today, the technology is helping to make a broader range of decisions.
Is your goal to find the highest price that the customer is willing to pay?
Rosenman : "In principle, yes, but pricing is only a small part of the story. There is no uniform price for each product displayed through Amazon. The price of your product can change according to your reputation, your advertising, the location of your business, etc. We help sellers decide which products to sell and how much inventory they should keep, according to the trends and the market’s needs. We’re slowly becoming the brains of the business.
"Our information is now involved in 2 billion transactions a year – 2-3% of the transactions made through Amazon."
What will happen if everyone uses your product? Will competition become too intense to bear?
"Every retailer makes decisions within his own context. Let’s say that you advertised to a certain target market, or you bought all the merchandise of a given supplier, and you therefore got it more cheaply, while I buy only one product sold specially. Our pricing decisions will be different."
Rosenman and his partner, CTO Eyal Lanxner, founded Feedvisor in 2011. The company launched its product in 2013, and has grown rapidly. "We have over 100 employees, including 80 in our center in Ramat Gan and 30 in the United States, in New York," Rosenman says. "We’re supported by one of the best funds in the world, General Catalyst, which invested in companies like Snapchat and Airbnb." The company has raised $43 million.