Yalochat, a five-year-old, Mexico City-based conversational commerce platform that enables customers like Coca-Cola and Walmart to upsell, collect payments and provide better service to their own customers over WhatsApp, Facebook Messenger and WeChat in China, has closed on $15 million in Series B funding led by B Capital Group.
Sierra Ventures, which led a $10 million Series A financing for the company in early 2019, also participated.
The round isn’t so surprising if Yalochat’s numbers are to be believed. It says that since the beginning of the COVID-19 pandemic, its platform has seen a tenfold increase in volume, and a 650% increase of message volume as more large enterprises — especially outside of the U.S. — use messaging apps to manage some of their sales operations and much of their customer service.
Yalochat is chasing a fast-growing market, too. According to the 10-year-old, India-based market research company MarketsandMarkets, the conversational AI software market should see $4.8 billion in revenue this year and more than triple that amount by 2025.
Certainly, having conglomerates on board is speeding along the company’s growth.
“With Coca-Cola, we started in Brazil and we helped them run their commerce when it comes to talking with small mom-and-pop shops,” says Yalochat founder and CEO Javier Mata, a Columbia University grad who studied engineering and founded three other companies beginning in 2013 before launching Yalochat.
“They had such success running their ordering process that they then took us to Mexico and Colombia, and we’re talking with [them about entering into the] Philippines and India.” Says Mata, “You try to get fast success in one market, then the conglomerate takes you into other areas of business so they can optimize their workflows around sales and customer service in other countries.”
Still, he argues that if you build your product the right way, it becomes a no-brainer for customers.
In pitching companies like Walmart, for example, he says Yalochat would “start with something super simple but high value that they could launch in a week. We’d say, ‘That process for sales that it has taken you years [to organize], we can get it out for you by Friday.’ Then we’d just do it.
“It was low stakes for them to try us out, and as soon as they saw our conversion rates, we were introduced to other [units] with the corporation.” Says Mata, “I think why a lot of other companies haven’t been successful is that [their tech] is not simple or doesn’t really work. We made ours scalable, easy to launch and capable of running smoothly without passing that complexity to end users.”
B Capital is plainly buying what Yalochat is selling. Firm co-founder Eduardo Saverin — who famously co-founded Facebook — calls Mata and his team “phenomenally strong” and suggests there’s little to stop their trajectory right now. “Yalo is an example of a Latin American business that is already today in Asia. And if you’re building a conversational commerce enablement for large enterprises that redefines the way they touch customers — [meaning] messaging applications, the most engaging medium in the world today — should that really be confined to Latin America or Asia? Absolutely not.”
Saverin compares the startup to B Capital itself, which has offices in LA, San Francisco, New York and Singapore.
The firm has already made bets in the U.S., Europe and Asia, since getting off the ground in 2015. Now, with Yalo, it has its first investment that’s principally headquartered in Latin America, as well. “For us,” says Saverin, who grew up in Brazil, “we didn’t start investing everywhere on day one. But that’s the mission.”