Why we invested: YaloChat
This article was co-authored by General Partner Rashmi Gopinath and Principal Crissy Costa
Conversational commerce, technology that allows e-commerce through chat, messaging, voice assistance, or other natural language interfaces, is one of the fastest growing trends in e-commerce. According to a study conducted last year by Boston Consulting Group on behalf of Facebook, 40% of conversational commerce customers surveyed globally said that chat was how they first started shopping online, and an average conversational commerce buyer typically increases their spend by 30% in just a year as a result of highly personalized recommendations that unlock higher spending opportunities.
In markets such as Asia, Latin America and Europe, widespread adoption of messaging products allows businesses to use messaging platforms to connect with their customers in a highly effective way, providing an asynchronous medium to build long-term relationships and drive repeat transactions. This has created a massive opportunity for global brands to automate and personalize interactions with customers across messenger platforms, especially with the introduction of business APIs.
While commerce enablement was the first wave of use cases on conversational platforms, the second and bigger wave is all about enabling business workflows for large enterprises on messaging and chat platforms. In order to do this in a consistent and scalable manner, there is a need for a commerce enablement platform that can help enterprises leverage messaging platforms to build automated workflows, handle conversations and commerce transactions in app, and provide backend integrations and data sync capabilities with enterprise ERP, CRM and data warehouse systems.
This is why B Capital Group is excited to announce our investment in YaloChat, an AI-based conversational commerce platform that started in Latin America and has quickly grown globally. Based out of Mexico, with offices in San Francisco, Brazil, and India, Yalo’s industry-leading workflow automation platform marries a no-code workflow builder with world-class AI, helping global businesses use conversational commerce to increase sales and improve customer relationships.
As a global venture firm, we truly believe that innovation has no borders. This belief drives us to look for tech innovators and category creating startups outside of the confines of Silicon Valley and even the U.S. in search of companies that have the potential to quickly scale to new regions. While we have a fairly robust portfolio in North America and Asia, Yalo is our first investment in Latin America. And speaking of firsts, Yalo is also our first deal that was executed completely over Zoom and virtual meetings. We are grateful to CEO Javier Mata and his management team for their patience with our adapted diligence process in this remote-work environment.
When we first met Javier, it was clear that he was uniquely suited to capitalize on this opportunity, as his vision for Yalo stemmed from years of experience working directly with retail and CPG customers in Latin America and building multiple messaging solutions prior to Yalo. As a serial entrepreneur, Javier was working on another company in the e-commerce space when he realized that the booming adoption of messaging platforms can bring an even bigger transformational shift in business workflows and customer interactions.
We are especially bullish on the company’s best-in-class business metrics, rapidly growing base of Fortune 500 enterprise logos, strong management team, huge market opportunity and highly differentiated product offering. Yalo powers commerce and workflow automation through messaging tools for some of the world’s largest brands across CPG, retail, ecommerce, and financial services such as Walmart, Nike, Coke, Unilever, Dominos, Pepsi, AT&T as well as the largest enterprises in LatAm and Asia such as Coppel, Banco Azteca, Elektra, Farmacias del Ahorro, Aeromexico, ICICI Bank, among many others.
For customers such as Coca Cola Femsa, Yalo has radically improved the efficiency of its distribution system by enabling tens of thousands of stores to handle orders, inventory management and logistics over WhatsApp, leading to an increase in average order sizes by 30% and cost savings of over 50%. Similarly, Banco Azteca has seen 30% increases in new account openings and customer satisfaction rates of 93% as a result of leveraging Yalo’s platform for personalized customer interactions. Yalo has grown over 7x in the last couple years and is on track to triple growth this year. The platform currently handles over 70M messages on a monthly basis for 40M users globally.
As the prevalence of messaging platforms continues to increase, global brands will win as a result of personalization, exceptional customer service, and meeting customers where they want to engage and transact. Our partnership with BCG gives us the opportunity to drive awareness and visibility about Yalo’s offering with BCG’s Global 2000 clients across 50+ countries. The B Capital team looks forward to working with Javier and the Yalo team in their next phase of growth and bringing a more “human” experience to customer and business engagements.