Casting a cold eye on customer behavior and their future lifetime value has brought the Los Angeles-based startup Retina $2.5 million in new funding.
The new financing was anchored by previous seed round investor Crosscut Ventures (the Los Angeles-based venture firm), and shows how the startup ecosystem in Los Angeles is allowing for companies based in the Southern California ecosystem to increasingly look in their own backyard for their capital needs.
Vendors can use Retina's Shopify app to process data and get a predicted customer lifetime value. For sellers who aren't integrated with Shopify, they can have their data processed by Retina to get that predicted customer value. The company guarantees brands a 20% to 30% lower cost per acquisition of online customers or their money back.
Retina bases its analysis on recency, frequency and churn rates to map out customer acquisition, according to the company's spokesperson. The software collects that data by analyzing the log of previous transactions in a customer data or payment platform, according to a statement.
“Not all customers are created equal and, in fact, a majority of them are poison for the business,” said Michael Greenberg, Retina co-founder and chief executive, in a statement. “Retina determines which customers will spend more as soon as they make their first purchase, not six months from now. Our customers are saving millions of dollars in online advertising, while also increasing sales. This funding allows us to expand our services and bring our insights to even more brands in 2020.”
Customers already using the product include online retailers like Madison Reed and the subscription grooming company, Dollar Shave Club.