Stay Ai’s tech helps Shopify brands get customers to make that second purchase

Customers abandon their online shopping carts all the time, and of those who sign on to subscribe to monthly product deliveries, some 17% end up canceling around the time the next payment is due.

Serial e-commerce entrepreneurs Gina Perrelli, Pierson Krass, who co-founded e-commerce agency Lunar Solar Group, and Taylor Cawiezell started Stay Ai in 2021 (back then it was called Retextion) to help Shopify brands build up their subscription programs, reduce the number of customers canceling and increase customer lifetime value.

Prior to Stay Ai, Perrelli and Krass launched three commerce enablement tools, two venture-backed apps and their self-funded data platform KnoCommerce, which they exited to WeCommerce in 2022.

Here’s how it works: Stay Ai developed a recurring commerce enablement platform for subscriptions, clubs and memberships with loyalty tools, including SMS chatbot, surveying and rewards programs to help brands increase customer lifetime value. Right now it is deployed across the Shopify ecosystem.

All of that is managed by its ExperienceEngine, an AI-powered system where merchants can perform marketing procedures, like A/B testing, and then leverage predictive analytics and machine-learning models to make better decisions on how to deploy them. For example, one of Stay Ai’s clients, Olipop, was able to increase subscriber revenue by 35% within 90 days of beginning to use Stay Ai’s tools.

Stay Ai, Shopify merchant, customer retention

Stay Ai’s merchant portal. Image Credits: Stay Ai

“With cancellations typically, the highest cancellations happen between order No. 1 and order No. 2,” CEO Perrelli told TechCrunch. “So, how do we get that number down so that you actually become profitable? It can be as easy as telling customers on an upcoming notification that they were going to get a gift, which made them hold out one more order, this is typically where brands become profitable on a subscription purchase. Getting them over that hump is a huge game-changer.”

After launching a year ago, Stay Ai is now used by approximately 300 Shopify merchants, including Vita Coco, Momofuku and Snow, while revenue is pacing 10x from 2022, Perrelli said. The company charges a $500-per-month fee for users and then takes 1% and 19 cents for all subscription transactions.

Building on top of Shopify has been popular lately, with startups like Polar Analytics, Triple Whale, Replo, PostscriptShop Circle and Popup attracting venture capital interest within the past year for their tools targeting merchants on the marketplace. Stay Ai is the latest company to join that list announcing $15.1 million in Series A capital to build on its growth. The investment included $8.6 million led by Telescope Partners, with participation from Boulder Food Group, Riverpark Ventures and Vanterra Capital, and a previously undisclosed $7.5 million that was led by Watchfire Ventures and a group of individuals, including Sharma Brands founder Nik Sharma and Postscript founder Adam Turner.

Stay Ai intends to use the new funding to expand on its team of 50, accelerating its innovation roadmap and additional acquisitions. In the past year that included an acquisition of churn reduction app RetentionEngine.

“With the acquisition of Bellwethr, we are layering more machine learning into our tools,” Perrelli said. “For some average A/B tests, we get about a 20%, sometimes 30%, churn reduction. When you add an upsell, it starts to add up.”

Beaconstac lands $25M investment for its QR code management platform

QR code tech, which exploded during the pandemic as businesses searched for hygienic alternatives to physical touchpoints, continues to grow in popularity particularly across sectors such as restaurants and outlet retail. According to Insider Intelligence, more than 99.5 million smartphone users will scan a QR code by 2025, up from 83.4 million in 2022. There’s a potential downside — some argue QR codes reduce the need to hire employees who collect payments and service customers — but it seems clear that the tech, for better or worse, isn’t’ going anywhere.

That’s benefitted startups like Beaconstac, which works with companies including United Airlines, Amazon and Deloitte to create end-customer QR code experiences. In a sign of just how rosy business has been, Beaconstac today announced that it closed a $25 million Series A funding round led by Telescope Partners with participation from Accel.

Co-founder and CEO Sharat Potharaju says that the new capital will be put toward expanding the startup’s team and product R&D.


Image Credits: Beaconstac

“We’ve seen tremendous growth since the beginning of the pandemic because our QR code technology offers businesses an efficient, user-friendly solution for creating contactless experiences,” Potharaju told TechCrunch in an email interview. “We see more businesses continuing to adopt this technology because it streamlines the customer experience. The pandemic has only amplified the existing need to connect the physical and digital worlds better.”

Potharaju co-founded Beaconstac in 2019 alongside Ravi Maddimsetty. Potharaju is an investment banker by trade, having held posts at Merrill Lynch and Fieldstone Private Capital Group. Maddimsetty, a software engineer, was an IT associate at Morgan Stanley and contributed to open source Linux projects including the GNOME desktop environment.

With Beaconstac, Potharaju and Maddimsetty sought to ride the QR code adoption wave, building a platform that allows businesses to create, manage and track QR codes across different physical touchpoints. Using Beaconstac, companies can modify aspects of branded QR codes including the shape, captions and background colors to match their design languages.

Beaconstac also lets companies create QR codes that track engagement, like a customer’s location at the time of a scan. While not a feature every patron is likely to be comfortable with, Potharaju argues that it’s helping companies acquire first-party data at a time when more platforms (see Apple) are becoming averse to tracking. (Whether you agree with Potharaju depends which side of the privacy debate you fall on, of course.)

“Beaconstac’s platform does not collect any personally identifiable information when a QR code is scanned — we are compliant with GDPR regulations around security and privacy,” Potharaju said. “Consumers can always request data deletion under GDPR rules.”

While Beaconstac competes with vendors including Flowcode and, the company claims to have over 20,000 customers — double the figure from last year. Potharaju declined to share revenue figures, but said that Beaconstac — which has offces in the U.S. and India — plans to double its 75-person workforce sometime this year.

“In 2019, my co-founder and I were asking the question, ‘Our phones are great at getting us online, but why aren’t they better at connecting us with the physical world?,'” Potharaju said. “Beaconstac [is] helping companies … build digital cohorts based on interactions in the physical world.”

Beaconstac lands $25M investment for its QR code management platform by Kyle Wiggers originally published on TechCrunch

Hotel Engine raises $65M at a $1.3B valuation as corporate travel rebounds

With the pandemic heading into its second year, people all over the world are traveling more for work again. If you’ve flown anytime in the past few months, the packed planes are in part evidence of that.

Further evidence that travel is rebounding lies in the number of people staying in hotels, and the money going into startups that serve the industry as well as travelers. Hotel Engine is the latest such startup, having just raised $65 million in a Series B round at a $1.3 billion valuation.

Returning backer Telescope Partners led the financing, which also included participation from new investor Blackstone. Notably, the investment values the Denver-based company at nearly 9 times higher than the $150 million valuation it achieved when it raised $16 million in a Series A round in 2019 — its first round of funding after bootstrapping for four years.

Hotel Engine describes itself as a “Lodging Performance Network.” Or in other words, the startup is a B2B members-only, global booking platform that aims to provide companies access to better lodging rates as well as tools and insights designed to “optimize their travel programs.” Meanwhile, it partners with lodging providers (better known as hotels), who benefit from gaining access to more “high-value” business travelers, according to founder and CEO Elia Wallen.

Wallen started Hotel Engine in 2015 as a “simple” booking tool designed to support the hotel lodging needs of clients of another company he’d founded, Travelers Haven. That startup was more of a short-term corporate housing company.

Image Credits: CEO and Founder Elia Wallen / Hotel Engine

For the first two years, Hotel Engine was more of a side project for Wallen with admittedly “limited investment or attention.” But in 2018, he began to get more serious about it and began dedicating separate resources to the company, which led to triple-digit growth in a year’s time.

“Since then, we’ve been on an incredible growth trajectory,’ he told TechCrunch. And notably, Hotel Engine is something that many startups are not: profitable.

Between the third quarter of 2020 and the third quarter of 2021, Hotel Engine experienced a 201% increase in core bookings revenue and increased its customer base by 60% to over 40,000 companies. It also added 100,000 people to its membership base, bringing the total to more than 550,000. Meanwhile, its headcount has swelled from 119 to 300 over the same time period. The company expects to hire another 400 people in 2022. 

Wallen believes Hotel Engine is unique in the way that it leverages technology to connect businesses and lodging partners globally. 

“Our approach allows our customers the ability to centralize their lodging needs on one platform from sourcing and negotiation to booking and reconciliation,” he said. “Our technology provides significant savings and world-class customer support on a no-contract platform.”

Looking ahead, the company is eager to expand its international footprint.

Image Credits: Hotel Engine

Ramzi Ramsey, managing director at Blackstone, believes that Hotel Engine provides “a unique and differentiated” experience, especially for industries that have historically been underserved by traditional travel booking companies that do not specialize in group or long-term stays.

By providing a set of fintech and expense management software tools to make the booking process less painful, Hotel Engine has seen “explosive growth” in recent years, he points out.

“For example, Hotel Engine has expanded the addressable market for hotel providers by facilitating upfront payments, as many companies do not have the working capital for large group or long-term stays,” Ramsey wrote via email. “As the economy reopens, we expect Hotel Engine to be a strong secondary beneficiary of the recently passed $1.2 trillion U.S infrastructure bill.”

Telescope Managing Partner and Founder Mickey Arabelovic joined Hotel Engine’s board as part of the new funding round.

“Since our investment in late 2019, we’ve worked closely with Elia and the Hotel Engine team, and are consistently impressed by their passion, tenacity and singular focus on business lodging,” said Arabelovic in a written statement. “There is no other company that delivers a friction-less, easy-to-use solution for travelers, and they’re just getting started.”