Friday Funding: Zappi Raises $170M

The Raise

Zappi is a tech startup that uses artificial intelligence to help businesses evaluate marketing campaigns and product development prior to launch.

This AI-powered consumer insights company just raised $170 million in growth capital, led by Sumeru Equity Partners and a number of other undisclosed investors.

Robotic Research

Zappi intends to make it easier for companies to predict consumers’ responses to products or ads, before they’ve even been exposed to them.

It’s not difficult to evaluate these things after the fact. As soon as a company launches a new product or campaign, they are flooded with sales data, customer demographics, and insights into consumer or user trends. Once this data exists, a company can incorporate it into its strategy. But what about before the product launches?

To predict consumer demand, companies traditionally leverage tools like surveys or focus groups, prior to product or campaign launches. These methods are typically slow and expensive. In some cases, the data can even be misleading, or stifling to innovation. Although most companies aren’t likely to admit it, there’s often a heavy reliance on educated guesswork to predict consumer behavior.

This is the problem that Zappi is trying to solve, by analyzing insights from old launches via its AI-based technology to formulate new outlooks. It has already piloted its solution to high profile clients including McDonald’s (MCD) and PepsiCo (PEP).

Looking Forward

Accurately predicting consumer interest is a persistent challenge. Venture capitalists have been investing heavily in finding a solution. Investments in AI-enabled market research have recently skyrocketed. In 2022, for the second year in a row, they eclipsed $2 billion.

With this money, companies will ideally be able to predict what consumers want with more accuracy. For businesses, this could mean less money wasted on expensive market research. And, for you, it may mean less time watching boring ads for boring products.

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