The artificial intelligence (AI) powered personalization e-commerce company, Coveo, has acquired London, U.K.-based Qubit for an undisclosed amount.
Louis Têtu, Coveo’s chair and CEO, described the English, 90-person firm as a “highly recognized player in the commerce intelligence space,” and said the acquisition will enable Coveo to expand its AI-powered commerce search, recommendations, and discovery with deep online retail merchandising and personalization tools.
Qubit’s expertise is in the application of AI to personalize commerce experiences in such areas as luxury, beauty and travel.
“I’d say that the acquisition of Qubit accelerates Coveo’s product roadmap.”
Coveo employs artificial intelligence and machine learning to build commerce products that use data to create personalized experiences through software services. Coveo creates products focusing on customer service intelligence, contact centre intelligence, and e-commerce in general.
Qubit specializes in business-to-consumer, AI-powered merchandising, according to Têtu.
“We’re talking about intellectual property and expertise in the area of product recommendations powered by AI, merchandising for large brands, so this is a great compliment to our well-established position in the e-commerce intelligence and AI space,” Têtu noted.
Brian Kilcourse, a managing partner at Retail Systems Research (RSR) in Miami, Florida, agreed. He told BetaKit that both companies use AI and machine learning models to detect a consumer’s intent, and then to offer personalized information for shopping.
Kilcourse cited research from Google that reported in 2020 over 60 percent of all shopping journeys in the United States began in the digital domain, even if they finished in a bricks-and-mortar store. “RSR has stated that a personalized experience is the next big iteration of online shopping,” Kilcourse said.
“So the acquisition is very timely,” he noted. “The industry needs what the companies have to offer. In short, I’d say that the acquisition of Qubit accelerates Coveo’s product roadmap.”
Before the Qubit acquisition, Coveo already had a robust presence in Europe with a number of customers and a team on the ground in London, according to Têtu. “Obviously the addition of 90 employees in London, as well as a large customer base, deeply extends our presence in Europe,” Têtu said.
The combined companies will bring Coveo’s staffing up to around 750 people. Têtu noted that throughout the diligence and planning of the acquisition good care was taken to ensure the two companies would blend well together.
He said that from the first day every employee over at Qubit knew their roles, and where they would fit in. “We don’t anticipate any major challenges there,” Têtu said.
Coveo will retain all of Qubit’s employees.
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Têtu dismissed the idea that Coveo has any competitors.
“We don’t know of any other company that has the span of applications and the deep application of AI in personalization, recommendations and search combined that we have. While there are point solutions in the search area, Coveo is really about bringing modern highly personalized experiences to leading brands,” he said.
Têtu is not wholly incorrect, other recommendation engines exist for shoppers, however, Coveo’s technology offers breadth and depth lacking in many others’.
One fellow Québec startup offering AI-powered personalization in e-commerce is HeyDay, which combines conversational AI and automation with sales and support teams. It has e-commerce and customer relationship management integrations with Shopify, Lightspeed, and Magento.
Qubit is Coveo’s second acquisition. In 2019, the company acquired Tooso, an AI-based digital commerce engine company, to accelerate and expand its capabilities for the digital commerce market.
Coveo began in 2005 in Québec City, but Têtu didn’t join until 2008. His involvement came as an angel investor into Coveo, at which point he was invited to become a partner in the company, and its CEO.
In 2019, Coveo raised $227 million in a later stage investment round led by OMERS Growth Equity. Coveo had completed five previous rounds of funding, raising its Series A in 2006. The company has received investment from the likes of BDC Venture Capital, and Montréal-based investors Tandem Expansion and Propulsion Ventures. Têtu, who was behind software company Taleo (acquired by Oracle), also invested in the company’s Series A and B rounds.
Previously, in 2018, Coveo raised $100 million from San Francisco-based Elliott Management in exchange for a 27 percent stake in the company.
Qubit hasn’t been idle on raising funds either. Founded by a small team from Google in 2010, the company has raised a total of $74.9 million. Its most recent raise was a $40 million Series C round in 2016. Têtu declined to say whether any of Qubit’s investors were exiting because of the acquisition.
Têtu said Coveo would keep the Qubit software and functionality with plans to converge the two platforms over the next several quarters.
Asked about other potential acquisitions, Têtu said: “To the extent we can find technology, whether through acquisitions or through organic investment that can improve our core platform, we’ll be looking at both.”