New Investment: Xena Intelligence
We are pleased to announce that the Seaplane Venture Fund has held its first close and made its first investment. We are now proud pre-seed stage investors in Xena Intelligence, an AI-led ecommerce platform with impressive early traction.
Starting an ecommerce business is easy but standing out is hard because the internet has infinite shelf space. Enter Xena, which uses its proprietary technology to crunch a vast amount of data to automate and optimize advertising for sellers on the vast Amazon marketplace. Xena is easy to use and implement and helps sellers save time, grow sales, and increase margins. Xena also provides user-friendly reporting and an inventory management tool to help sellers to stay on top of their business.
Xena stood out to Seaplane for several reasons. It has impressive traction, which speaks well to the product, market, and ability of founder and CEO Akhil Suresh Nair to execute. We also like its business model as Xena has a base layer of subscription revenue but also grows with its customers because it earns performance revenue tied to the amount of ad dollars that Xena manages.
Xena plans to expand to Walmart and Shopify to become a multi-channel platform. It chose well by starting with Amazon’s marketplace, though, as Amazon is far and away the largest US online retailer and its advertising business is booming. Amazon’s ad business grew 25% in 2022 on a $31 billion base, significantly outpacing ad revenue growth at Alphabet (+7%) and Meta (-1%). We don’t see that trend slowing because Amazon has such a unique position near the point of sale and is highly motivated to keep growing its ad business and ecosystem because Seaplane estimates the gross margins in the ad business are ≈2X the rest of Amazon.
Lastly, we’ve enjoyed our conversations with Akhil and think his background as a consultant to ecommerce companies is extremely relevant. Akhil and Xena also deserve a shout out for recently graduating from one of the world’s most respected startup accelerators, Techstars New York, which accepts less than 1% of applicants.
The Seaplane Venture Fund is available only to accredited investors. Performance of past deals or a lead investors' track record is not a guarantee of future returns. This content is provided for informational purposes only, and should not be relied upon as legal, business, investment, or tax advice. You should consult your own advisers as to those matters. Investing in venture capital funds is inherently risky and illiquid. It involves a high degree of risk and is suitable only for sophisticated and qualified investors. An offering to invest in the Seaplane Venture Fund will be made only by the private placement memorandum, subscription agreement, and other relevant documentation of any such fund and should be read in their entirety.