Merx, a UK-based startup building the world’s first AI-powered conversational platform to connect brands with consumers via WhatsApp, has today announced a £1m pre-seed funding round.
The round was led by VentureFriends, the European early-stage VC firm, with participation from Ascension, the London-based early-stage VC firm.
Merx has built a conversational commerce platform. Using AI, brands are able to engage with customers through WhatsApp and similar messaging platforms, helping them find products or answer questions on product care.
As businesses face increasing challenges with diminishing returns from traditional digital marketing channels, such as email and paid ads, brands are turning to ‘conversational commerce’ solutions to introduce hyper-personalised, AI-driven customer interactions.
Conversational commerce, a new pillar of commerce that allows customers to engage directly with brands through messaging channels, is experiencing rapid growth. According to Statista, global spending on conversational commerce is expected to increase from $41bn in 2021 to $290bn this year, a sevenfold increase in just four years.
WhatsApp, a key platform in this space, is the second largest social platform globally with nearly three billion users. In the UK alone, 74% of the population uses WhatsApp - a figure that increases to 82% in Germany and 90% in Italy. On average, users spend 17 hours a month using the app. Open rates on WhatsApp exceed 95%, compared to 10% to 40% for email. Compared to the billions of sales that are attributed to Facebook (1st) and YouTube (3rd largest) globally, WhatsApp can be considered an untapped market that is expected to grow significantly with the rise of AI.
Merx allows brands to build meaningful, scalable relationships with customers via WhatsApp and similar channels, ultimately driving higher retention, increased revenue, and valuable customer insights (from 0 and 1st party data collection) in a privacy-compliant manner.
Merx targets the enterprise consumer goods and retail market and is already operating at significant scale handling high volumes of interactions, enabling thousands of purchases for customers. Merx is already working with some of the world’s most prestigious luxury brands - and supporting hundreds of thousands of interactions between brands and customers.
The pre-seed funding will be used to attract top-tier software engineering talent, accelerate product innovation, refine AI models to enhance personalisation and support enterprise platform integration.
