Sydney AI startup Cherry Recommends nabs Y Combinator backing as it expands into the US

Sydney artificial intelligence startup, Cherry Recommends, has been selected to take part in the legendary accelerator program by Y Combinator.

The US venture capital fund invests US$125,000 for at 7% stake in the companies it brings into the program.

Cherry is an AI promotion recommender platform that grows sticky online customers by increasing customer engagement, conversion and retention.

Co-founder Isaac Donnelly said Cherry Recommends has helped companies increase conversion and retention. Its client base includes include Vitable, Mosh, and Phoria.

“Probably the most satisfying part of building Cherry is seeing results beyond our expectations,” he said.

“We have been working with Mosh, a leading online men’s health platform, and since using Cherry their churn rate has dropped by 18%.”

Donnelly, a former McKinsey engagement manager and Fulbright scholar (researching probability, prediction, and optimisation in the US), who has a PhD in applied maths from University of NSW, co-founded the business in 2020 with Rian Finnegan, a former Microsoft software engineer. The pair first met when they were undergrad students at UNSW, living as housemates in an rundown mansion.

The startup took part in the UNSW Founders 10x Accelerator program and is the fourth startup from the program to be accepted by Y Combinator into its accelerator.

Finnegan said the foundations for Cherry Recommends stemmed from under-valued everyday experiences.

“In 2020 I was doing a lot of home cooking and visiting my local grocer regularly. She would recommend produce – fruits, vegetables, etc. – and after a few weeks, she started to know what I liked,” he said.

“Naturally, I kept going back, but it got me thinking about why online stores can’t personalise their customer experience as effectively.”

Finnegan said Cherry Recommends sweetens online relationships just like that.

“Its AI analyses customer data, creates a rich view of a customer, then delivers personalised promotions that increase satisfaction and revenue,” he said.

“It takes the complexity out of personalisation. By taking care of the data collection, analytics, and machine learning, it leaves businesses able to focus on what matters – relationships with their customers.”

Donnelly, who’s looking to head to the US shortly – the company is focused on growing in the US market, said the mission of Cherry Recommends is to help businesses grow and increase the lifetime value of their customers.

“Right now, Cherry is helping startups and scale-ups grow by delivering better, more targeted promotions to their customers,” he said.

“Software and apps have been selling directly to consumers for a decade, and now online brands, like Mosh, are disrupting industries by going directly to the consumer. As customers’ expectations rise, companies need to deliver constant personalized experiences. Cherry Recommends is there to help.”

He said they’re now looking to talk to new clients such as SaaS, subscription and e-Commerce companies with more than 1000 subscribers to help them increase conversion and retention.

Cherry Recommends previously raised $500,000 in a seed round led by CP Ventures in mid 2021.