AI shopping assistant and shopping network Karma raised $25 million in Series A led by Target Global with participation of MoreTech Ventures and existing investors NFX and Altair Capital.
Karma allows users to plan their next online purchases, get notified about real-time price and inventory updates, access coupons and earn automatic cashback, it also helps consumers save and track products. Since then, Karma has launched browser extensions, along with iOS and Android apps. The company now employs nearly 60 people across Tel Aviv, Minsk, Belarus and the U.S., and has grown to include over 30,000 retail partners such as Apple, Nordstrom, Farefetch, Target and Nike.
“Karma started with a very simple need: just knowing when something goes on sale in your size and color in real-time,” Jonathan Freidman, Karma CEO and co-founder, told TechCrunch in an interview. “The idea is originally from my wife. She came to us one day and said: why isn’t this process automated? We started from there, basically just knowing when there’s a price change and automating that for the user,” he said.
Today, Karma has three core functions. Firstly, the service allows users to create shopping lists where they can save a product for later in one universal cart. In the background, Karma will automatically notify the user if there’s a price change or if something comes back in stock. This function is focused on helping users to streamline and plan their purchases in one location.
Secondly, the service automatically searches the web for coupons at checkout, which is similar to the premise of PayPal’s Honey service. When asked how Karma compares to Honey, Friedman stated that although Karma does have an automatic coupon-finder like Honey, this feature is just one aspect of Karma’s offerings. He said Karma is different than Honey because it takes users on the complete pre-purchasing journey and aggregates relevant services all in one place, while also surfacing coupons. However, PayPal’s interest in Honey is also about capturing users ahead of purchase these days. Its integration into the PayPal app sees the fintech company targeting shoppers with personalized deals.
Friedman also outlined that Karma’s third core function allows users to automatically earn cashback on hundreds of retailers. Karma surfaces all of the relevant cashback offers that users are eligible for at checkout.
“All three of these functions aim to help you automate a lot of the pre-purchasing journey and save time and money. We always want to try to provide users with the best value, but it’s very important for us to streamline the experience,” Friedman said. “Today, you need a lot of different apps for different things like coupons or cashback, but we offer all of that in one ecosystem,” he noted.
Karma currently has around three million customers and around 650,000 monthly active users. Its userbase has been growing between 15% to 20% month-over-month, and Karma users have saved a total of over $144 million so far this year.