In a world where technology and innovation are moving at breakneck pace, the customer experience in ecommerce is remarkably static. In most cases, the process of buying an article of clothing or a consumer electronics device online, say, is little different today than 10 years ago – shoppers still have to navigate the same old menus and screens to find the items they want.

Loops hopes to change that. The San Francisco-based start-up, which is today announcing it has raised $3.5 million of seed finance, has developed an artificial intelligence-powered platform aimed at brands and retailers that it says will fundamentally change the ecommerce experience.

“In the era of ChatGPT and Claude, consumers expect real-time intelligence and personalization but that’s not what they get when they go to a retailer-owned channel such as an app or a website,” says Ari Nazir, the CEO and co-founder of Loops. “That experience feels like we’re stuck in 2015.”

That sort of frustration was the real-life inspiration for Loops, launched last year, with Nazir’s co-founder İlker Selim Zorluoğlu, running into problems when trying to buy a present for his infant daughter. “I found something I thought was right online, but there was no facility to ask the retailer any questions about it, and when I emailed them instead, I never heard back.”

The experience prompted Nazir and Zorluoğlu to develop Loops, with the aim of providing retailers with an AI-enabled tool to transform the ecommerce experience they offer. Using the tool, shoppers can search a retailer’s site using natural language queries – and ask as many questions as they like to hone their search and decide whether to make a purchase. On clothing purchases, the tool also enables a virtual try-on process, where shoppers can upload a picture of themselves and see what items of clothing would look like on them.

From the shopper’s perspective, it’s a relatively simple innovation that makes the ecommerce experience much more intuitive and personal. But to enable this functionality, Loops has had to build a significant underlying infrastructure capable of mining retailers’ catalogues and inventory for the data required to respond successfully to shoppers’ queries.

Nazir hopes this infrastructure is what will set the company apart from rivals also trying to shake-up product discovery. “The biggest mistake we see is treating AI as a collection of features,” he explains. “A retailer does not need five different AI products that each understand one slice of the customer; it needs one system that understands the catalogue, the business and what the shopper is trying to do.”

Pilot studies and early adoptions have proved encouraging. So far, Loops has signed up around 70 customers across ecommerce markets including food, clothing, homewares and consumer electronics. The company says these customers have seen major boosts on key metrics such as customer engagement and sales conversion. Turkish supermarket chain A101, for example, has seen 83% higher observed purchase conversion following the implementation of Loops.

The company sees major opportunities to build on these foundations, both in existing sectors and in new industries such as energy and financial services, where it is pitching the infrastructure element of its platform. Today’s $3.5 million seed round, led by a16z Speedrun, with participation from NTT, CTI, Alumni Ventures and Monday Capital, will help in that regard. It should support Loops’ capacity for product development, customer deployment and international expansion.

“AI is changing the interface between companies and their customers, but the lasting platforms will be the ones that can make it work reliably inside real businesses,” says Fareed Mosavat, Investment Partner at a16z Speedrun. “Loops is starting in commerce, where the link between a better AI experience and business value is unusually clear. Its pilot conversion and early customer expansion show brands want a platform that can own more of that journey.”

Still, there will be plenty of competition to provide that platform given the size of the ecommerce market with studies showing it is worth between $3.89 trillion and $6.3 trillion in 2026, depending on where you draw the boundaries. The big AI models already enable consumers to search ecommerce sites using natural language, while a growing number of companies offer tools that rival those of Loops – major players include Algolia and Bloomreach, both of which now have valuations running into the billions following several successful fund raises.

Nevertheless, Loops insists it can hold its own, citing early customer acquisition wins with large players, including Mavi, the giant denim retailer. “We’re already working with some of the largest retailers in the world,” adds Nazir. “It’s not a toy – we’re driving actual results and engagement.”