Wish, the US-based developer of a personalised shopping app, closed a $50m series C round on Friday last week, helping to illustrate how social curation is helping to grow the e-commerce sector.
The round, which valued Wish at $400m, was led by venture capital firm Founders Fund and also included Legend Capital, the corporate venturing unit of conglomerate Legend Holdings, corporate-backed VC firm Foundation 8 and GGV Capital. It has now raised $80m since it was founded in 2011.
Wish’s platform enables users to create their own ‘wishlists’ of products, and then uses algorithms and machine-learning technology to point them to similar products they can buy. Its business model represents the direction that e-commerce and is heading, from straightforward shopping to a model that can direct customers to products they never knew they wanted.
The technology is similar to that now being used by sites such as Pinterest, which recently raised $200m at a $5bn valuation, and Mogujie, which raised a similar sum last month at a $1bn valuation.
However, while those sites are essentially social networks that moved into e-commerce, Wish and other businesses have attempted to marry personalisation and commerce from the start. Wish also uses the wishlist information to help online retailers reach relevant customers more efficiently.
Wish announced its funding at the same time as news emerged that Fancy, a US-based e-commerce company that has its content curated by its users, is in the process of raising a series D round that would value it at $1.2bn.
Instead of wishlists, American Express-backed Fancy’s interactive element involves users ‘fancying’ items they like from its high-end online store that are then promoted to their friends on the site, adding an extra social element to its personalisation. Users can then buy the items directly using Fancy’s mobile app.
The curation aspect of Fancy’s offering is being replicated in other sectors as well. Media company Scripps recently led a $25m series C round for Tastemade, a social platform through which its users, or ‘Tastemakers’, can connect with each other and collaborate on food-based video content through the Tastemade app.
Pursuing this kind of user-led, non-hierarchical model has enabled Tastemade to grow quickly as its video makers can build their own audiences without the company spending money. Its Tastemade Network already has more than 18 million unique visitors each month, and it appears in more than a dozen languages across a range of websites and devices.
Lastly, evidence of the growing preponderance of the user-curated model can be seen in the music streaming sector, in which two significant acquisitions were made this week.
Internet company Google acquired Songza for a reported $39m on Tuesday, enabling backers including Amazon and William Morris Endeavor to exit. Although many streaming services offer social aspects to their users, Songza’s can vote tracks up or down, and the company is best known for its concierge service, which can match playlists to users’ moods.
Google plans to incorporate Songza’s technology into its own Google Play Music service, and a similar approach is being taken by Rdio, a streaming service that acquired AOL-backed competitor TastemakerX the day before.
TastemakerX’s service begun as an app that allowed users to buy virtual shares in songs, the ‘value’ of which would depend on their popularity with others. It evolved into a simpler service in which users could curate and share their collections, but Rdio bought the company to add to help users not only stream music they enjoyed but to locate new music.
The curation aspect is becoming more and more present on the back of personalisation technology similar to that used by Wish, and it is likely to become a more prominent feature as e-commerce and other taste-based companies raise funding, and provide their investors with exits, in future.