eCommerce Plans comeback with

E-commerce is adapting to a new reality following the surge in online consumer behavior during the pandemic, resulting in a considerable slowdown in the sector, as per a recent article from

To reinvigorate growth, investors are shifting their focus to startups specializing in the pre-purchase phase, particularly those developing technologies to introduce consumers to new products. Many of these startups utilize generative AI to craft personalized experiences aimed at capturing consumer attention and investment.

Key areas of focus include:

- VR and AR tools enabling consumers to visualize and interact with products in their own surroundings.

- Search tools designed to enhance product discovery by integrating directly into websites, apps, and marketplaces.

- Product information and inventory management systems aimed at enriching product data for better display and utilization.

- Price optimization tools that gather and analyze data from various sources to dynamically set prices.

- Personalization startups processing data to deliver tailored online content experiences.

- Review platforms aggregating and validating product reviews to aid consumers.

The year 2023 witnessed a significant decline in e-commerce funding compared to the previous two years, with $8.9 billion raised across 461 deals, marking a 72% and 53% decrease from 2022's $31.8 billion and 972 deals, respectively.

However, in Q4 2023, there was a notable uptick, with 116 e-commerce deals amounting to $3.8 billion, more than doubling the deal value quarter-over-quarter. Particularly, startups in the pre-purchase space secured $135.3 million across 21 deals in Q4.

Significant deals during this period include OfferFit, a Boston-based AI-driven promotional analytics company, which secured a $25 million Series B led by Menlo Ventures in November, and Tavus, an AI-generated promotional campaign video startup, which raised an $18 million Series A led by Scale Venture Partners in March.

The exit value also rebounded in 2023, reaching $14.4 billion across 42 deals, compared to 2022's $5.8 billion from 65 deals, largely due to the October IPO of J&T Express, an Indonesian delivery company.

Notable exits within the broader e-commerce landscape include the October public offering of Singaporean online retailer Webuy and Rockwell Automation's acquisition of Clearpath Robotics, an autonomous technology startup focused on order fulfillment, also in October.