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Syte Raises $21.5M as Battle for Retail Visual Search Heats Up

You can’t always get what you want, as Mick Jagger crooned in the Rolling Stones’ 1969 hit—but players in the visual search arena hope that’s never the case when shoppers are inspired and ready to spend.

Syte, the Israeli visual search startup that counts Farfetch, Marks & Spencer, Tommy Hilfiger and Boohoo as clients, raised a $21.5 million Series B round, building on an $8 million Series A dating back to July 2017, and bringing its total funding to $30 million.

The visual search technology provider, which puts artificial intelligence at the core of its products, is one of many entrants into a market that’s hoping to shift e-commerce from a foundation built on keywords and text-based search, to a fresh new approach to product discovery that focuses on images—and your smartphone’s camera.

People, especially young ones, are all too accustomed to the ease of whipping out their smartphone when they see something they like. Maybe they snap a photo for review later. Perhaps they’re inspired by the merchandising in a store window but don’t have time to stop in and shop. Visual search is offered up as a way to convert these moments of inspiration into real-time product discovery, and possibly even conversion, in a process deemed intuitive and frictionless relative to opening up a search engine and casting about for the right words to describe what you’ve seen.

And that’s precisely what a company like Syte is built to achieve.

“We have a vision to transform product discovery, and thus the e-commerce experience, for both retailers and consumers,” Ofer Fryman, who co-founded Syte and serves CEO, said in a statement.

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Text-based search can often be imprecise in a way that visual search tends not to be. ViSenze, a visual search competitor, asked 149 consumers to look at a dress in real life and try to find it online using the traditional keyword approach. Most (96.9 percent) gave up after 90 seconds and those who succeeded took between four and six minutes. By contrast, snapping and uploading a photo of the dress to a visual search platform provided an accurate result in just two to three seconds, on average.

But visual search also eliminates language barriers and can help retailers reach potential customers who may be unable to text-search in the merchant’s native tongue.

Since its founding in 2015, Syte has steadily rolled out a suite of offerings designed to help brands and retailers offer richer customer experiences—online as well as in bricks and mortar. Recommendation engines serve up items based on customer interests and preferences while the company’s smart mirrors guide shoppers toward more of what they’re looking for.

And Syte’s in-store stylists and clienteling apps aim to bridge clicks-and-bricks product discovery, “allowing shoppers to upload an image of a particular item they are searching for, browse a feed of brand influencers for style insights, and shop a complete fashion or home look,” according to the company’s website.

Fryman said the changing retail landscape is one of the biggest factors behind the rise of visual commerce.

“For us, the validation of our technology and product development has come from our clients, who have selected Syte to help them stay competitive in the fast-evolving retail industry,” he said. “With this round we look forward to expanding our product offering in order to support our clients in more aspects of their digital innovation.”

Viola Ventures led the Series B and was joined by Storm Ventures, Commerce Ventures, and Axess Ventures, in addition to previous investors NHN Ventures, Magma, Naver Corporation, Line Corporation, Remagine Ventures, North Base Media, KDC Ventures and Lyra Ventures.

The funding news comes on the heels of Syte’s acceptance into the seventh installment of Lafayette Plug and Play, a three-month accelerator for retail and e-commerce stemming from a partnership between Silicon Valley’s Plug and Play Tech Center and the Galeries Lafeyette Group in Paris.

“The prestige of the brands and retailers who will be participating, paired with the incredible companies that will be alongside us, made the value of the program very clear,” Fryman said of the potential to connect with “decision makers at France’s largest retail brands.”

Syte also expects to open a San Francisco office by the end of 2019 after setting up a New York City outpost in July, and the company plans to hire 70 additional staff wordwide as it gears up for an expected 300 percent increase in 2020 revenue growth.

There’s good reason for Syte’s optimism. The market for visual search is set to quadruple to more than $28 million in 2027 from its 2018 value of $6.7 million, according to Zion Research, which noted that image searched grabbed 60 percent of all visual search activity last year.