How the Agentic AI Era Spells Opportunity for E-Commerce Startups

Our newly published Digital Commerce M&A Report has revealed a surge in dealmaking in the sector, with the first half of this year seeing a 22% year-on-year jump in transaction volume. 

Comparing the current energy in the sector to the momentum boost which occurred during the pandemic, our e-commerce Sector Principal Ralph Hübner notes in the report that “the boom we saw back then was largely down to a pressing necessity, with e-commerce coming into its own as social contacts were limited and consumers were confined to their immediate surroundings. By contrast, the transformative force we’re seeing on the horizon is of a technological nature, with AI reconfiguring how humans interact with Digital Commerce solutions. 

It's also changing the face of the e-commerce startup ecosystem. We recently discussed how AI summaries in search results are lowering click-throughs to websites, forcing online businesses of all stripes – from content publishers to retailers – to rethink decades of received wisdom on how to stay on customers’ radars. 

As that article noted, the shift in focus from SEO to GEO (generative engine optimisation) has led to hefty private equity backing for a new breed of trailblazing GEO specialists. Similarly, startups seizing the opportunities yielded by AI’s disruption of consumer behaviour online are making waves right now. 

Agentic commerce promises to entirely upend how consumers shop online. Indeed, our very conception of shopping as an activity is being redefined, with AI agents capable of browsing for items, comparing prices and even completing purchases at checkouts on behalf of human users. While we’re very much in the early days of agentic shopping technology and it has yet to go mainstream, conversational AI interfaces are increasingly being used to get product recommendations – a trend that will only increase with the rollout of Google’s AI Mode. 

One startup establishing itself within this new paradigm is Firmly, an e-commerce platform which enables “shopping at the point of inspiration”. In other words, its APIs allow vendors to sell products directly through AI conversations, social posts, live streams and digital wallets (increasingly vital as Gen Z and younger Millennials continue to do much of their online shopping through social media rather than formal storefronts). 

For brands, expanding their presence in this way will become ever more critical to sales as AI agents cast their nets across multiple channels and platforms. Firmly aims to provide this visibility, and by plugging directly into merchants’ real-time inventory counts and price alterations, it ensures all transactions are accurate and actionable. As well as raising USD 5.2m to date, Firmly has recently forged a partnership with Perplexity to scale shopping transactions through its AI search platform.  

Another startup getting attention in this space is Daydream, a fashion-focused e-commerce platform which raked in an impressive USD 50m seed round last year. It leverages agentic AI technology to provide users a personalised shopping experience. Answering questions on favourite looks and brands gives you a “style passport” which the agent uses to pull the most relevant selections from partner companies including Net-a-Porter, Altuzarra and Uniqlo.

Users can upvote and downvote selections, upload photos of clothes to better inform the agent on their tastes, and generally turn the interface into their virtual personal shopper. It’s this level of personalisation which its backers believe will distinguish Daydream from other AI shopping interfaces, with one VC involved in the fundraise hailing it for “delivering a specialty store experience”. (And, as an aside, agentic platforms like Rid.me will even sell on unwanted clothes on your behalf.)

One of the most recent fundraises in agentic commerce is the USD 9m received this month by Graas, a startup which has developed a series of agents including Cartlyst, a B2B e-commerce agent which can execute orders based on procurement workers’ text messages and even pictures of handwritten lists. It intends to use the new windfall to fund the development of what it has called “Agent Foundry”, which as the name suggests is the proprietary infrastructure it is using to create its e-commerce agents. 

It’s worth noting that, while B2C shopping habits are largely shaped by societal factors like passing trends and social media inspiration – meaning there will likely always be a large degree of human involvement in decision making – B2B sales are typically predicated on objective evaluations of product specs, which suggests that autonomous AI agents will be particularly effective and sought-after on this side of e-commerce.

As the aforementioned partnership between Firmly and Perplexity underscores, the advent of AI-based browsers is sure to accelerate demand for a new generation e-commerce tools. 

Echoing the competition which took place between the likes of Microsoft, Netscape, Mozilla and Google during earlier iterations of search, the new “browser war” is seeing the likes of Perplexity, OpenAI, The Browser Company, Amazon, Google and Microsoft battling to assert themselves in the AI search era. New browsers like Perplexity’s Comet and The Browser Company’s Dia are competing to bring automated shopping to mainstream consumers, while the likes of Amazon and Cloudfare are working to block AI bots from other companies from scraping their e-commerce data.

It remains to be seen which companies will emerge as the dominant players in the agentic era. But whatever the outcome of the browser war, it’s clear that the disruption to Digital Commerce we’ve already seen with, say, Google’s AI Overviews and AI Mode is only a taste of things to come, and the new landscape presents fertile ground for startups to take root.

If you’re a founder or senior executive and you’d like to discuss how the Digital Commerce market might view your company, get in touch with our Sector Principal Ralph Hübner to start the conversation. 

Don’t forget to download our newest Digital Commerce report, as well as our other M&A reports which explore transaction statistics, valuation trends and pivotal deals within a range of sectors including Autotech and Enterprise Software. Subscribe to ensure you never miss out on the latest research and insights from the team of expert analysts here at Hampleton Partners.