At HTwenty, we had a recent conversation with an ecommerce brand who complained about not being able to fully understand why her clients weren’t returning. Her team didn’t have the in-house capabilities to deep dive into the customer persona to understand what were the wants and needs of each customer type. For months, her marketing team blasted users with email and SMS marketing campaigns calling for them to purchase any and every product in stock without any significant result. Thousands of dollars were spent on Facebook and Instagram ads without any change in sales levels. As the company began to research solutions to increase revenue growth, they realized there were several options on the table: (i) Hire a team of growth hackers; but this was impossible due to limited resources. (ii) Use an existing solution such as Klayvio; but again, this was not feasible because of the lack of technical expertise to use the tool. Or (iii) continue with the status quo.
We soon realized that this problem was not unique to this brand but was a perennial nightmare for the almost 68 million small- and medium-sized ecommerce brands that operate globally. These businesses are struggling to retain and upsell existing customers while also facing the herculean task of attracting new buyers in an ever-increasing competitive consumer advertising market.
At HTwenty, we decided to invest in Aument because their solution directly solves this problem faced by millions of SME e-commerce companies. We were excited that this was not just a Latin American problem, but one that has global implications with very little companies trying to solve it.
For additional context, Aument is a marketing automation tool that helps e-commerce brands increase sales by firstly segmenting customers and then employing different tactics to increase retention, reduce cart abandonment, and reduce amount of time between repeat purchases etc. Aument does this using a two-step framework where it first automatically analyzes customer data to segment customers and create customer profiles. It then allows ecommerce customers to send specific marketing campaigns (email, SMS, social media, SEO) depending on the type of customer and the type of action required. Essentially it is a tool that replicates what growth marketers do for large companies but in an automatic way with a single click of a button.
In analyzing the opportunity, we spoke with several SME e-commerce brands who identified with the problem that Aument is trying to solve and we ultimately decided to back the company in January 2022 alongside investors such as Expa, Matterscale, Newtopia, the founders of Sendgrid (marketing communication tool sold to Twilio) and Francisco Alvarez-Demalde (founder of Riverwood Capital). Below is a summary of several aspects of the investment thesis:
- Market Opportunity: Ecommerce is growing globally, and the average ecommerce company is not able to hire growth hackers. They spend on ads without understanding customer segmentation and the right tactics. The need for SMEs to better understand how and where to market to their customers is important to differentiate them in an increasingly crowded e-commerce market.
- Fragmented Market: The largest player focused on marketing automation has less than 1% of the addressable market. At the same time, there are no large scale LATAM players or new global entrants over the past few years.
- Strong Technical Team with Marketing Growth Experience: The Aument founders have worked on the problem for several years during their previous roles hacking growth for leading global startups / scaleups and have led highly technical teams. They know what it takes to build a world-class product and have demonstrated this in their previous leadership roles. As such, founder-product fit was undoubtedly achieved.
- Global Trends of Ecommerce Enablers: In many markets, the first layer of enabling e-commerce is unlocking financial and logistical capabilities so that consumers have the ability to afford the product and secondly so that the product can easily be shipped from point A to B. E-commerce 2.0 is focused on e-commerce software to increase productivity; this includes marketing automation. We believe that Aument is building for e-commerce what CleverTap (backed by Sequoia and Tiger Global) has built for mobile apps and if successful can dominate a multi-billion-dollar opportunity.
For these reasons, we are excited to partner with Emilio Di Marco, Alan Helouani, Sacha Landesmann, and Mario Leon Rojas to power e-commerce companies’ growth into the future
Please see Aument’s webpage for additional information.