Tampa-based venture capital firm Florida Funders has participated in a $7.5 million seed funding round for XGen, a company with offices in Tampa and Vancouver, B.C. that specializes in creating highly personalized and relevant interactions between online retailers and their customers.
According to a news release, the backing from Florida Funders’ Fund 2 will help XGen invest in product development and expand its sales and customer support teams. It’s the fifth investment for the firm’s Fund 2 and follows capital injections for the likes of Simplebet and Kliken.
XGen’s technology, powered by artificial intelligence, makes it possible to add personalized content and recommendations to email messages and craft what it calls dynamic social content designed to increase brand loyalty and retention. It also adds content variants to e-commerce sites so that users stay on the sites longer and are presented with the most relevant product recommendations.
In the fourth quarter of 2020, the release states, XGen grew its revenues by 400 percent as it added top fashion and luxury retailers — such as MSGM.IT, MMI.IT, Locks Lash and KHAITE — to its platform. Worldwide, e-commerce accounts for $3.5 trillion in revenue for retailers, who increasingly struggle to attract shoppers to malls and other brick-and-mortar outlets.
“E-commerce is growing rapidly and XGen is aligned with that macro trend. They’re the element missing in the e-commerce tech stack,” Florida Funders Managing Partner Tom Wallace stated in the release. “XGen is driving significant revenue increases for some of the world’s most recognizable fashion, jewelry and cosmetic brands, and their personalization approach to make an individual’s specific needs and preferences a priority is what both consumers and marketers not only want but need.”
According to XGen, some $330 billion is spent, globally, on digital marketing, and its technology has the power to increase return on investment by up to 10 percent. It’s making inroads quickly, the release stated, because its technology requires no complicated configuration or coding to implement, which adds to clients’ ROI.
Wallace said Florida Funders was also inspired to back XGen because of the ingenuity shown by the company’s founder, Frank Faricy, who helped his sister build an e-commerce platform around a line of makeup she created. Subsequently, sales of her products went from $0 to $1.2 million in three months. Faricy could have remained involved in his sister’s business but chose to trade in his equity stake for capital that he used to develop and launch XGen.
“At XGen, we are focusing on client results, as we’ve seen double-digit revenue growth across our current portfolios and a vast majority of our clients have seen a 20 percent lift in average order value by using our engine,” Faricy stated in the release. “We’re excited to partner with Florida Funders and we’re proud to be part of the tech community in the Sunshine State. There’s no better place than Florida to grow XGen in this booming startup scene.”