Tulip.io Inc., whose mobile software allows sales associates and retailers to engage more effectively with customers, has raised $40 million in a new round of venture-capital financing led by Kleiner Perkins Caufield & Byers.
The financing, which marks Kleiner Perkins’ largest investment in a Canadian technology startup, will help Tulip double its staff, expand to retailers in Europe, South America and Asia as well as develop its software for other industries such as the hospitality sector.
Toronto-based Tulip provides a platform that gives sales associates real-time access to consumer preferences and customer data on a mobile or tablet device. The company’s software is already being used by major U.S. retailers such as Hudson’s Bay Co.’s Saks Fifth Avenue and Coach Inc., and is used across 25 countries and in 7 languages. It is also a member of Apple Inc.’s Mobility Partner Program alongside International Business Machines Corp., Cisco Systems Inc. and SAP SE.
While customers are increasingly going online to buy goods, in-store purchases remain a strong driver of retail sales, according to a recent survey published by Deloitte and commissioned by Tulip. Roughly 70% of survey respondents said more than half of their sales come from physical stores.
To help stem losses from online competitors, Tulip assists brick-and-mortar retailers to train their sales staff to provide a more personalized shopping experience with their customers. A major U.S. retailer reported a 4% increase in year-over-year sales and a 2% customer conversion rate in stores using Tulip’s technology, according to the company.
“The main focus with this capital is us, with Kleiner, thinking we can go international faster if we can fund some of that growth ahead of plan, ” said Ali Asaria, Tulip’s Chief Executive.
In addition to the investment round, Mood Rowghani, general partner at Kleiner Perkins, will also join Tulip’s board. Mr. Rowghani said he visited three stores in California that use Tulip’s technology before agreeing to invest in the company and believes its platform can help bridge the divide between traditional retailers and e-commerce.
“Traditional retailers have this treasure trove of intimate knowledge of their customers,” said Mr. Rowghani. “It’s a huge opportunity if they’re armed with the right tools and be able to marry it with digital technology. Tulip is at the core of that experience.”
Tulip was founded in 2013 after Mr. Asaria stepped down as CEO of Well.ca, a Canadian-based e-commerce website that specializes in beauty and wellness products. Tulip has previously raised about $11 million from a series of investors, including SoftTech VC and Fung Capital USA and has about 130 staff in Toronto and Kitchener, Ontario.
Before founding e-commerce companies, Mr. Asaria cut his teeth as a software developer at BlackBerry Inc. where he created one of the company’s first games for its smartphones. The executive declined to comment on Tulip’s current valuation.
“We have a long-term 20-year plan for this company,” Mr. Asaria said. “We want to build one of the largest enterprise companies and we want to find investors that are interested in that long-term alignment.” He added that the size of the funding round should be enough to sustain the company’s growth for the next five years, after which it will explore a possible IPO.
The investment also marks the latest sign of a maturing Canadian technology sector with Kleiner Perkins being the latest major U.S. venture-capital firm to invest in a Canadian startup. Last year, a fund managed by Goldman Sachs Group Inc. led a round of financing with Toronto-based Hubba Inc., while artificial intelligence developer Element AI secured a $102 million Series A round of funding led by Data Collective in June.
U.S. investment in Canadian technology startups reached 1.06 billion Canadian dollars (US$842 million) last year, more than triple what was spent in 2010, according to Thomson Reuters.