Go read this report on an AI shopping app that actually only used humans

If you can’t bother filling in your credit card and address details when shopping for jeans online, the Nate app sounds like a service you might want. The company bills itself as an ‘artificial intelligence startup’ that uses AI to autofill customer information for $1 per transaction, saving shoppers minutes when shopping through the Internet. app.

But instead of using high-tech methods to make purchases, Nate’s transactions were often handled manually by workers in the Philippines, according to a deep dive by information. Speaking to two people with direct access to Nate’s internal data, information reports that “the share of transactions that Nate handled manually rather than automatically ranged between 60% and 100%” throughout 2021. A person with knowledge of fundraising efforts told the outlet that the company n hadn’t shared its manual process with some potential investors as the company tried to raise funds.

People with direct knowledge of the technology used by Nate said information that bot blockers on retailer sites were a problem. “Nate’s software had to figure out how to locate specific buttons on the page, like the one that adds an item to cart,” according to the report, which resulted in a large number of transactions being manually entered by real humans. . Some orders were placed hours after Nate users hit the “buy” button, information reports.

That hasn’t stopped Nate from raising millions in his quest to make something that’s already very easy even easier. Venture capital firms Coatue Management and Forerunner Ventures have invested $50 million in Nate over the past two years:

One consequence of the pandemic-fueled shopping boom is that venture capitalists — facing fierce competition for deals and paranoid about missing out on the next Stripe — have all but started to launch money on startups that promised to make e-commerce smoother, even those with questionable business models or technology. . Today, amid slowing e-commerce sales and macroeconomic challenges, many startups are facing accounts.

“In the startup landscape, you realize that a lot of companies had a great story, but their reality” wasn’t, said Keval Desai, an investor at InterWest Partners who previously backed e-commerce companies. such as The RealReal. “People are waking up and saying these valuations can’t be sustained.”

Late last year, with only around 100 transactions per day, Nate decided to launch a promotion to boost his business and presence, buying ads on TikTok, TV and public transport. Users were given $50 to spend on certain websites when they downloaded the Nate app and created a profile, and transactions skyrocketed – up to 10,000 a day.

But users had found a way to trick the system by creating multiple accounts with the same banking information but using new email addresses and phone numbers. After the company removed duplicate users and ended the promotion, daily transactions dropped back to 75-100 per day.

A spokesperson for Nate said information these figures – as well as the range of 60% to 100% – were incorrect”, and the assertions questioning [Nate’s] proprietary technology are completely baseless. But it wouldn’t be the first time a start-up has claimed that machines were responsible for the work done by humans – and the casts.”Magicfrom Nate in a whole new light.

Lily information report here.

Edwin S. Wolfe