My first acquisition: Zipchat AI, the future of e-commerce live chat
How the deal happened, what got me to buy it, and what's next?
Last month I published the Boring Apps Masterplan and I’m happy to announce that the first Boring Apps acquisition just happened 🎉 - I’ve acquired a majority stake in Zipchat AI and I’m joining the Zipchat team as its new CEO / Product lead.
I’m super excited to join Luca and Carlo on our path to taking conversational commerce to the next level.
So, let me tell you about Zipchat, why I’m excited about it, and how the deal happened so quickly! 🚀
What is Zipchat AI?
Zipchat AI is an AI-powered sales bot that knows your brand by heart and acts as a 24/7 virtual sales clerk.
Online store design and product presentation have gone a long way, but they can never be perfect. People will always have questions regarding finding the right product, how the product is made, how it’s shipped, what your policies are, and so on.
Some people will just leave your store. Others will ask a question, wait a couple of minutes, and then leave. That’s where Zipchat comes in. Zipchat is online 24/7, knows all there is to know about your store ( better than your support team ), answers instantly, and nudges people to ask questions!!!
And it works! Zipchat has proven itself to bring significant conversion rate increases to customers. The level of product understanding that Zipchat has is so sophisticated that it can even act as a pharmacist in online pharmacies.
Zipchat is currently used by hundreds of brands worldwide on multiple e-commerce platforms like Shopify, WooCommerce, Magento, and even custom stores.
What makes me excited about the company?
Zipchat fits perfectly the app criteria I outlined in my “master plan”:
It’s a simple, single-purpose e-commerce app
The app provides clear value to merchants and is easy to explain
It’s growing like crazy, with a double-digit MoM MRR increase and a strong organic pull
I’m buying the shares at an amazing price compared to similar companies
The founder I’m buying out has a similar profile to mine, so we should be able to transition seamlessly
On top of that, there are some unicorn factors that make me extra excited:
Zipchat is by far the best AI sales-bot app in the Shopify/E-com Tools space and I believe we have a shot at becoming the market leader
The majority of the team stays on, most notably Luca and Carlo, the current CMO & CRO, who are responsible for the amazing growth the company has achieved so far.
How did I get so “lucky” with this deal?
Besides being the luckiest person in the world in general, there are three reasons why I got to close this deal:
Long-term relationships
A wise man once said: “Play long-term games with long-term people”.
I have known Michael ( the original Zipchat founder ) for almost 10 years now. Way before I was doing Shopify apps and he was achieving one business success after another we were colleagues in a small French startup - Kactus ( which is also crushing it btw ).
We shared curiosity for tech, a burning desire to build successful businesses, tight wallets, and a taste for €2 frozen Picard lunch plates. We bonded. Mike discovered dropshipping, started crushing it, and was kind enough to show me the ways. We both left our job.
He proceeded to crush it with e-commerce, I built Checkout X and we moved on. We kept in touch once in a while. Until last month, when Mike saw my post about buying apps and we kicked it off.
See, Mike is the co-founder of another AI company, and needed someone to take care of Zipchat and its customers. He believed that I had the competency to do it. Hopefully, I won’t disappoint him.
What are the odds, right?
Actually, quite big. Imagine all the people you’ve interacted with in the past 10 years. All the colleagues, partners, people you met at a networking event, etc. Sooner or later you will cross paths again. If you have treated them well and have shown competency, they will reach out with opportunities.
Play long-term games with long-term people.
Always pay your bills.
Don’t fuck people over.
It’s going to pay off one day.
Flexibility
Another reason the deal worked out was that we managed to find a working solution for everyone on the team. We were facing a situation where:
We had an original founder with know-how, who cared about the product but didn’t have the time needed to keep improving it.
Two other co-founders who had stepped up and wanted to keep going with the app.
And me, building an app portfolio with certain financial goals/limitations
In the end, we ended up with a solution where everyone is happy, Mike stays as an advisor, Luca and Carlo get to keep going even stronger, and I have good chances of making the return I’m looking for.
None of this would’ve happened if I had a one-size-fits-all model. I’m hoping that my small size and ability to be flexible will be an advantage in other deals going forward.
Speed
Last but not least, was speed.
Time is of the essence, Zipchat needs to continue growing and my ability to iterate and actually close the deal was a major factor.
It took us less than 30 days to come up with different acquisition scenarios, find the right one, negotiate with all co-founders, perform due diligence, draft agreements, and sign them. 14 of those days were the holidays.
Next steps
I’m already getting onboarded and we’re drawing up plans to take Zipchat to the next level.
I’m optimistic about the future, but you never know if this is going to be a major win or a major loss.
Either way, subscribe to my newsletter and I’ll keep you updated on how it goes. 🤘
A great step forward! Good luck to you and the team!