Spent, the startup BetaKit covered when it was gearing up to demo its personalized deals platform for grocery stores at South Carolina-based accelerator Iron Yard, recently released a new recommendation-as-a-service rest API called Relify. After debuting its technology in September, other startups approached Spent looking to leverage its recommendation technology for their own apps, which got the company thinking about opening up its API.
CEO Terry Horner said in an interview with BetaKit that in addition to requests from other startups, another big driver behind Spent diversifying its offerings is the long sales cycle when it comes to grocery chains, lasting anywhere from nine to 12 months. One way to slow down the company’s burn rate and find a more consistent revenue stream was tapping into the demand it saw for its back-end technology.
“What we found since graduating from the accelerator, we were getting a lot of other startups coming up to us, asking us what we do…they started asking us questions about ‘well, is there a way for you to open up that technology so I could use it?’” said Horner. “Recommendations are turning out to be important in a lot of different startups, the more we talked to other startups the more we realized the technology we had would be beneficial for them. We’re not forgetting about groceries, that’s still a huge area.”
Horner used the example of Amazon opening up its Amazon Web Services as an analogy to describe the move, citing how it leveraged its own IT infrastructure as a product. Spent was originally built to help grocers push personalized deals based on an individual’s shopping history, and Relify as an API can be used by startups to power content recommendation along the lines of Netflix, product recommendation like Amazon, and people recommendations similar to LinkedIn or Twitter. Another use case Horner described is for food, recipe, and restaurant-related apps that want to power personalized selections based on a user’s behavior.
The startup has a freemium business model so developers can get started for free to power up to 500 recommendations, or pay $29 per month for 5,000 recommendations or $199 for 50,000, with variable rates for overage costs. It also has an enterprise package with custom pricing available.
Recommendation APIs and engines have been the subject of several acquisitions over the past few years, with Hunch and Svpply acquired by eBay, Sortable acquired by Rebellion Media, and Algo Anywhere by 500px, validating the need for relevant, personalized recommendations. With Hunch now also made available as an API, and others like Ness and Xen looking to do the same thing, it is a crowded space. However, Relify believes that the API’s ability to power a broad array of apps from content, to products, to social, while Spent as a company also focuses on serving brick-and-motor grocers and later other retailers, puts it in a good position to grow.
“There are a lot of people who are spending a lot of money on building this type of technology because of the success Amazon and Netflix have had with it, and Spotify and Pandora and all these other guys,” Horner added. “What we feel we’re doing is unbundling that technology and offering it to anybody at a very cost-effective price.”
The move to open up the API while still working with grocery chains to integrate Spent’s technology shows either that the company does indeed want to have a product that doesn’t rely on the longer sales cycle, or that it’s not resonating with grocery chains and that Relify is the real opportunity. In terms of marketing the API, Spent plans to host several hackathons to lure developers and showcase the platform’s potential. Whether the company is able to scale the service will depend on building case studies around early adopters, and how the Relify API can increase traffic and engagement.