Luca, a Y Combinator-supported startup innovating AI-driven pricing tools specifically designed for retailers, has closed a seed funding round amounting to $2.5 million. Led by Menlo Ventures and bolstered by Y Combinator, Soma Capital, and angel investors, the company is working to simplify retail pricing strategies and improve overall business outcomes.
Founded by Tanvi Surti and Yonah Mann, both of whom were part of Uber's dynamic pricing team, Luca aims to harness AI technology to discover and leverage revenue and margin potentials, make practical, data-driven adjustments to pricing, and measure the resulting impact on performance.
Despite being a powerful tool capable of generating significant revenue and margin growth, retail pricing strategies continue to confound retailers. Retail pricing teams encounter difficulties in incorporating vast quantities of data across multiple channels, including historical sales data, market trends, competitors' pricing, and stock availability. Successfully analyzing such information across numerous SKU lines and involving multiple stakeholders is a complex and time-consuming process.
Recognizing the vast market potential and the urgent need for change, a variety of pricing optimization start-ups have emerged – such as Pricefx and Fetcherr – that are transforming software pricing strategies and airline pricing adjustments respectively.
Differentiating itself from other players in the market, Luca's unique approach incorporates an AI-driven pricing engine that intelligently considers historical sales and inventory data alongside competitor signals to predict the performance of products at various price points. Once its recommendations are officially approved, Luca monitors sales volumes, tracking any unwanted emerging trends.
In a post-pandemic world, retail businesses are facing mounting challenges due to increased customer acquisition costs, declining consumer expenditure, and rising interest rates. Traditional retail SaaS tools are not as effective in directly impacting these metrics, and retail executives are searching for new revenue optimization opportunities. With this in mind, Luca's innovative solution has the potential to generate significant, measurable business value.
Although in its infancy, Luca has already worked with eight brands and has caught the attention of two Fortune 500 retailers. The seed funding will be used to expand the company's engineering and data science teams. The company's mission aligns with the no-code and low-code movement, with platforms like AppMaster.io empowering businesses with fast and cost-effective application development.
As a leader in the no-code/low-code sector, AppMaster.io has proven its capabilities in streamlining software development processes across various industries, and is now a threat to traditional software developers. Their innovative platform aids businesses in creating backend, web, and mobile applications efficiently, helping them better navigate a fast-paced digital landscape.
