Onetext Raises $4.5m From Y Combinator, Khosla To Reinvent Shopping By Text

The emblematic online checkout acquisition has go bloated pinch friction. And while much companies are building solutions astir online checkout, fewer are rethinking it from scratch. One specified institution is OneText, which is building what it calls a “text-to-buy network” that lets shoppers complete purchases via matter message.

The company, founded by erstwhile PayPal employees, conscionable closed a $4.5 cardinal seed information backed by Khosla Ventures, Coatue, Citi Ventures, Y Combinator, Good Friends (the money created by nan founders of Warby Parker, Allbirds, and Harry’s), and Matt Bellamy, nan frontman of Muse.

Co-founder and CEO Jonathan Fudem came up pinch nan thought while moving connected nan checkout squad astatine PayPal. There, he saw galore upstarts pinch slick UX stumble complete nan aforesaid go-to-market hurdle: convincing merchants to switch retired their existing costs flows. 

“That’s a difficult pitch,” Fudem said, adding that galore merchants don’t moreover person nan state to take their checkout provider; it’s often decided by their e-commerce platform.

By utilizing SMS, OneText doesn’t require a merchant to switch their website’s existing checkout. While ample platforms for illustration Instagram and WhatsApp besides person e-commerce features, Fudem believes brands still request direct, ownable relationships pinch their customers.

OneText views itself arsenic a competitor to nan SMS trading companies known for mass, impersonal messaging and spammy links.

Instead, it uses a operation of devices — including AI-powered two-way conversations and humans successful nan loop — to amended conversions by 20% to 30%. Features for illustration cart recovery, post-purchase upsells, and shopper-specific recommendations lend meaningfully to that performance.

Under nan hood, OneText runs its ain wallet, which integrates pinch a brand’s existing processor to complete transactions. OneText securely vaults a customer’s costs accusation aft their first purchase. From past on, they tin reorder pinch a azygous reply.

This “card-on-file” setup is what OneText believes makes its matter commerce akin to charging items to a room during a edifice stay. 

To make that work, OneText uses what Fudem calls “consentful” automation. If a marque wants to complaint a customer for a reorder, OneText sends a matter saying nan costs will spell done successful 24 hours unless nan customer cancels. It’s opt-out by default.

Over time, it plans to grow nan web truthful shoppers tin usage their vaulted profiles crossed aggregate brands, pinch prefilled checkout information and smarter recommendations.

In that sense, nan institution is building toward thing overmuch larger: a cross-brand, SMS-native costs network.

“Building a consumer-facing wallet that’s 10x amended is really hard,” Fudem said. “But we tin create a business-to-consumer texting level that brings nan ‘charge it to your room’ experience, only now, it’s your telephone number. That’s really we’ll build nan network.”

OneText went done Y Combinator successful 2023 and softly built retired its level aft Demo Day. Today, nan level has midsized e-commerce brands, doing $10 cardinal to $100 cardinal successful yearly revenue, arsenic customers, Fudem says, though it besides supports smaller startups and ample enterprises.

“We’ve been scaling 3x twelvemonth complete twelvemonth and doing millions successful revenue,” said Fudem, who launched nan institution pinch CTO Daniel Brain.