South Korean artificial intelligence startup Waddle Corp. is gearing up to reshape the online retail industry with artificial intelligence-powered interactive personal shopping assistant Gentoo.
“We want people to think that a world without Gentoo is unimaginable,” Park Jihyuk, the chief executive officer of Waddle, Gentoo’s developer, said in a recent interview with The Korea Economic Daily.
“We aspire to completely transform the shopping experience by making it tremendously convenient and easy.”
Gentoo, which hit the market in July 2023, is an AI personal shopping agent built and run based on multiple AI models, including large language models, to provide tailored product recommendations based on users’ queries to other online shoppers.
It is designed to assist shoppers on virtual marketplaces find their perfect products based on their preferences, needs and budget. Better yet, this shopping assistant is available 24/7.
“We want to improve consumers’ shopping experiences covering the whole online shopping value chain from discovering products aligning shoppers’ tastes to their purchases,” said Park.
MULTI-AGENT ARCHITECTURE, MULTI-TURN CONVERSATIONS
As the online shopping industry has entered a new stage in the advent of the AI agent era, global tech giants and startups are rushing to develop their own AI agents for virtual shopping.
Amazon has added its own shopping assistant Rufus trained with the company’s proprietary LLM to its platform, while startup Perplexity has also introduced its own AI shopping agent.
Compared with its bigger competitors, the Korean AI shopping agent is not a second-best alternative, said Park, citing the multi-agent system powering Gentoo.
Multi-agent architecture is composed of multiple large and slim LLMs and other subset technologies, improving accuracy in search.
Its technology was recognized by OpenAI, which signed an enterprise deal with Waddle last October.
Gentoo uses LLMs to understand conversations with users and respond, as well as incorporating a mix of different models, including old and slim models, to recommend products, said Park.
“It (Gentoo) is capable of understanding the context in conversations,” said the Waddle CEO. “It carries out conversations based on the user’s purpose of shopping and asks the shopper follow-up questions about their needs. AI is in charge of this whole process.”
Gentoo also backs multi-turn conversations, allowing it to recommend a product based on a record of previous conversations with the shopper, like a human shop assistant for a store patron.
“Our goal is to offer users a personal shopping assistant like a veteran salesperson who can improve a purchase conversion rate on an e-commerce site,” said Park.
“We want to develop a virtual store salesperson who can help online shoppers have pleasant shopping experiences and finally make them purchase products.”
PARTNERSHIP WITH CAFE24
Gentoo is offered as a software-as-a-service to individual merchants on online marketplaces.
While Amazon Rufus is available only to sellers registered with Amazon.com, Gentoo can be used by individual sellers operating their standalone stores on any virtual marketplace.
Late last year, Waddle signed an agreement with Cafe24, a Seoul-based global e-commerce solutions provider, to offer Gentoo to brands setting up their online stores with Cafe24.
It was first introduced to Cafe24 merchants in November.
Separated from Cafe24 sellers, Gentoo is currently used by 10 e-commerce players in a wide range of sectors from food and beverage and fashion to sports, according to Waddle.
Some of them have already witnessed a notable rise in conversion rates when Gentoo recommended products to shoppers on their sites, compared to conventional ads and search engine use, Park said.
The startup also tested Gentoo with major Korean conglomerates in the real estate, insurance and auto industries, including Samsung C&T Corp. and Kyobo Life Insurance Co., to advance into areas beyond e-commerce, said Park.
GOING GLOBAL IS THE PRIORITY
Going global is Waddle’s top priority this year, Park said.
“The conversational AI shopping agent market is set to take off after growing rapidly since late last year, led by Amazon Rufus and Perplexity,” said the Waddle CEO. “There were still doubts about its success one or two years ago. But the time has arrived for us to go global amid the growing number of conversational AI agent users.”
The Korean AI startup plans to meet enterprise clients in the US, such as Shopify, this year to discuss offering Gentoo as a third-party plugin, added Park.
Later this year, it also plans to apply for Asan Voyager, a program designed by the Asan Nanum Foundation to assist Korean startups entering the US. The organization picks 20 startups every year to provide acceleration, coaching, community learning and long-term residency support.
Waddle also plans to carry out proof of concept projects with local clients in the US in the first half of this year, Park said.
SERIES-A FUNDING IN H2
In the first half of this year, the Korean startup plans to reinforce Gentoo’s marketing insights solution, which is still in its fledgling stages, with additional features that can be used in marketing campaigns, the CEO said.
Marketing insights can provide a holistic understanding of shoppers’ preferences, behaviors and needs.
“The analytics examining a record of conversations is becoming more important” as it can refine how products appear in search results and offer insights into search and shopping trends, said Park.
Waddle hopes to kick off a Series A funding round in the second half of this year to raise funds to accelerate the upgrade of its AI agent as a comprehensive solution powered by better user experiences in shopping, said Park.
The company has raised 2.7 billion won ($1.9 million) in total in the previous seed and pre-A Series funding rounds.
During the pre-A round, Waddle raised 2 billion won from multiple Korean venture capital firms, including Kakao Ventures, Fast Ventures and its earlier backer BonAngels Venture Partners in the seed round.
“We are on a mission to innovate the shopping journey,” said Park. “Changing someone’s shopping habits requires a deep understanding of someone’s taste, which can’t be achieved by technology alone.”
“This is why we spend so much time and resources on data analysis.”
Waddle is confident it can compete well with bigger global players in the AI agent market thanks to its expertise in conversational AI agent technology built since 2021, said Park.
By Sookyung Seo
skseo@hankyung.com
Jennifer Nicholson-Breen edited this article.
