Buynomics uses behavioral economics to help predict customer behavior. Here’s the 14-slide deck it used to raise $13 million led by Twitter-backers Insight Partners.
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- Cologne-based Buynomics has raised $13 million from Insight Partners.
- The startup collects customer transaction data and market insights to help inform companies’ commercial decisions.
- Check out the 14-slide deck used to raise the fresh funds.
A startup which says it combines behavioral economics and machine learning to help enterprises make commercial decisions has just raised a $13 million Series A.
Cologne-based Buynomics has created a software tool which companies can use to predict consumer behavior, and in turn, better gear their product pricing to their customer base.
“Our model builds on an insight that people as groups are very predictable,” said cofounder Sebastian Baeir. “Everything in nature, and people’s preferences, follow distributions.”
Buynomics’ algorithm “weeds out those parameters” for those distributions “from pre-existing data,” Baeir told Insider.
The startup gathers data from previous customer transactions, as well as questionnaires and market studies, which it applies to its machine learning model. This model is used to mimic customer behavior, and gives enterprises a better understanding of what commercial decisions to make, such as optimizing certain promotions or product prices so they better appeal to customers.
Baier noted that customers make a mixture “of rational and irrational decisions” which is reflected in their brand preferences — which is factored into the startup’s model when informing enterprises what product offers to make.
“For example, with price thresholds, $9.99 is seen as much lower than $10,” he added. “This irrationality is also distributed in the same way that our preferences are, and some fall for it more than others.”
Amid a volatile investing landscape for tech startups, Baeir found fundraising much more “tough” — with increased diligence in the process compared to 2021, he said. But the team “had a very early tick with Insight Partners”, a US-based growth private equity firm, which has previously backed Twitter, Shopify, and Udemy, who led the round.
Additional participation came from Coinbase backers LaFamiglia, as well as Seedcamp, DvH, and Tomahawk, bringing the startup’s total funding raised to $15.6 million, according to Pitchbook.
With the fresh funds, Buynomics will focus on developing its user interface and plan its expansion into the US.
Check out the 14-slide deck used to raise the fresh funds.