Charles raises €6.4M seed to bring ‘conversational commerce’ to WhatsApp

Charles, a Berlin-based startup that offers a “conversational-commerce” SaaS for businesses that want to sell on WhatsApp and other chat apps, has raised €6.4 million in funding.

Led by Accel and HV Capital, the seed funding will be used by the company to scale and meet existing demand for its conversational commerce platform.

Launched in 2020 by Artjem Weissbeck and Andreas Tussing after the pair had run a year-long experiment running a store in WhatsApp, Charles enables businesses to sell products and services via WhatsApp and other chat apps in order to “increase conversion rate, customer loyalty and ultimately revenue”.

The SaaS connects chat app APIs, such as WhatsApp and Messenger, with shop and CRM systems, like Shopify, SAP and HubSpot, all delivered through a user-friendly interface. The idea is to make it easier for businesses to meet their customers on the channels they already use and to bridge the gap between sales enquiries and support, and actual conversions.

” ‘Traffic’ and with it ‘conversion’ will exponentially move from the streets (retail) and the browser/native apps into chat apps,” says Weissbeck. “Thereby, conversational commerce will be the third big pillar of commerce, gluing together all channels and unlocking the full potential of personalization via the unique identification of customers via their phone number”.

This transition, argues the Charles founder, creates “tremendous challenges and opportunities” for companies in terms of customer journey design and the tech stack, which to date — Asia, aside — has been predominantly tailored around webshops and e-mail.

“Ultimately our technology provides the operating system for companies to master this challenge,” adds Tussing. “The core of our software integrates chat apps with shop/CRM backends in an intuitive interface that puts the human chat sales agent in the center, supported by chatbots and AI”.

Luca Bocchio, partner at Accel, says that conversational commerce is emerging as a “critical channel for brands,” and is a trend that will reshape the way brands interact with customers. [This is] paving the way for potential new category-defining tools to emerge,” he says, noting that Charles has the potential to be one of those tools.

“When we talk to potential clients it’s mostly existing customer service tools like Zendesk who are starting to add chat apps as an additional channel,” says Weissbeck, when asked to cite direct competitors. “These tools are usually built upon a ‘ticketing’ logic, optimized to solve customer inquiries as quickly as possible and with a clear focus on service cases, not sales”.

In contrast, Weissbeck says Charles is built upon a “feed” logic, showing customer interaction as an ongoing conversation and end-to-end relationship — in the same way as the customer sees it.

“Further we deeply integrate into shop/CRM-backends to make it easy for agents to sell product and create carts or contracts — all in a very design-driven and intuitive interface, that is fun to use for the agent and puts her/him in the center,” says Tussing. “Supported by chatbots, not replaced”.

Meanwhile, the revenue model is simple enough: Businesses pay a monthly base fee to cover Charles’ fixed costs and on top of this the startup earns money on conversions. “We take a small share of the net sales, ensuring we are co-incentivised,” explains Weissbeck.