E-commerce AI startup Loops raises $3.5M to create smoother online shopping experiences

E-commerce AI startup Loops Smart AI has raised $3.5 million in seed funding to develop a unified AI layer for online retailers, aiming to create smoother buying journeys and streamline the customer experience. Led by Andreessen Horowitz's a16z speedrun accelerator, the round also saw participation from NTT Docomo, Connecticut Innovations, Alumni Ventures, and Monday Capital.

Loops co-founder and CEO Ari Nazir explained that while most online retailers have adopted AI tools, they often do so in silos, leading to fragmented and disconnected experiences. For instance, a retailer might add AI tools for product searches, chatbots for customer questions, product description generation, and virtual try-ons separately.

Nazir and his co-founder İlker Selim Zorluoğlu discovered this issue during a vacation in Bali, as they struggled to purchase a gift online for their daughter due to unanswered messages across different channels.

To address this problem, Loops has developed a single, unified AI layer that can understand a retailer's entire product catalog, ingest its business context, and follow each shopper's intent from initial discovery to the end purchase. Loops relies on five core components, including AI search and product discovery, a shopping assistant that answers questions in real-time, a product enrichment tool to clean and standardize product catalog data, and a virtual try-on tool for visualizing product appearance.

By offering these capabilities within a single system, Loops can track the shopper's journey and provide immediate answers to questions during browsing. Loops has already transformed the shopping experience for over 70 online retailers, including Turkish supermarket chain A101, which saw an 83% increase in customer conversion rate after integrating Loops' AI tools.

Fashion retailer Mavi has also reinvented its shopping experience by allowing consumers to describe their needs to an AI concierge instead of searching through keywords or category lists.

The funds from the latest round will be used to scale Loops' platform globally, with plans to expand into other industries such as financial services and energy, aiming to create AI-native companies where AI becomes part of every facet of work.