Samantha Herrick:
Welcome back to the podcast everyone. This is the Tech Optimist, a show brought to you by Alumni Ventures, a show where we discuss the people, technology, and innovations shaping tomorrow.

Ross Correia:
I truly believe mobile apps are going to be the future. And I know when I joined Shopify, it was the same thing. I said, "Everyone's going to start shopping online."

Samantha Herrick:
That is Ross Correia, co-founder and CEO at Reactiv.

Ross Correia:
I thought retail, and that has been the case to a certain degree. I think e-commerce has definitely spiked, but I think I see the same pattern with mobile apps.

Meera Oak:
With that type of saturation, understandably, we saw this surge in customer acquisition costs from the brand side, and-

Samantha Herrick:
And that is Meera Oak, partner at Alumni Ventures.

Meera Oak:
I think that was this constant complaint, this frustration that how are brands expected to compete when the costs are just so high? And that's what I think was so exciting about the Reactiv opportunity to me.

Samantha Herrick:
So, if $1.1 trillion were in a hundred dollars bills, it would weigh, this is a real stat everyone. It would weigh approximately 11,000 tons. And that's me. My name is Samantha Herrick, the guide for this podcast.
All right, you guys know what time it is. Welcome back to the show. Today I'm going to give you another snippet into Reactiv, the startup that is here today. So, Reactiv is a Toronto based startup that has recently emerged from stealth mode with a focus on providing an AI-powered mobile commerce platform. So, recently Reactiv has announced a $5 million seed round led by Bonfire Ventures, and it was founded in 2023 by Shopify alumni, Ross Correia and Zack Elias.
As I had said, it offers an AI-powered mobile commerce platform, but some key features here that I really want to bring up, so there's no code mobile app builder. So this allows the e-commerce merchants to create mobile apps without coding skills. AI-powered customization. That's pretty self-explanatory, but it can generate a mobile app from an existing website. And then we have Reactiv Clips. So Reactiv Clips are a standout feature that can create a functional section of a client's app within an advertisement or social media post without requiring users to download anything. This could be huge. Grasping those customers while they have them within their scrolling and within their feed. It also has customer engagement tools, so it's designed to improve sale conversion rates, and they also have integration with Shopify so that it's available in the Shopify app store.
As far as traction goes, Reactiv claims its waitlist reflects $1 million in US annual recurring revenue, and they've already generated $100,000 from that waitlist. Some current customers include Camp Moore, Missouri Star Quilt Company, Top of the Mornin Coffee, and Canadian online perfume retailer, Fragrance Buy. So, the team started as a bootstrap team of 10 people, and then since August of 2023, they've added 18 employees and they plan to hire more in the future. Of course, future plans, the seed funding will be used to further Reactiv's engineering efforts, bring Reactiv Clips to markets, and to enhance the platform with more AI-powered features in developer tools. Reactiv aims to revolutionize mobile commerce by providing an easy-to-use, AI-powered platform for merchants to create and manage mobile apps, potentially disrupting the commerce space and its innovative approach to mobile shopping experiences.
So, that's all for me. We're going to hop into an ad, and they'll hop right into the interview with Ross and Meera. So, hang tight.

Speaker 4:
Looking to invest in the next big thing? Alumni Ventures Seed Fund offers you access to dozens of high potential startups at their earliest stages. These ventures are pioneering innovations across industries like biotech, AI, and energy. With strong lead investors and a focus on creating value, our seed fund gives you a front row seat to the future of innovation. Don't miss out on the opportunity to be part of the next wave of breakthrough startups. Visit av.vc/seed to learn more.

Samantha Herrick:
As a reminder, the Tech Optimist podcast is for the informational purposes only. It's not personalized advice and it's not an offer to buy or sell securities. For additional important details, please see the text description accompanying this episode.

Meera Oak:
Hi everyone. Welcome to the Tech Optimist podcast. Today we are joined by Ross Correia, the CEO and Co-founder of Reactiv, a promising early stage company in the portfolio and one I've had the pleasure of working with for over several months now. So, welcome Ross to the podcast.

Ross Correia:
Hello. Hello. Nice to be on the podcast. Thanks for having me here.

Meera Oak:
Awesome. All right, well let's kick things off a little bit, and I could never do this justice, so I'm going to ask you to tell us a little bit about Reactiv.

Ross Correia:
Let's do it. So, Reactiv, we're an e-commerce platform. We focus on mobile apps. We have a pretty big hunch that mobile apps are going to be the future. Whenever I talk to anyone these days, they tend to do most of their shopping on their mobile phone. It's ironic, because most of us at the company, we still do a lot of our shopping on the desktop. I kid not. Mostly for airplane tickets or hotels, but some crazy people, most crazy people do that on their phones. And we see a future, a very soon future where all shopping is done on your mobile phone. And rather than it being done in the browser, which tends to have tons of pop-ups, it's slow, it's clunky, sometimes it doesn't work, and then you have to go back to your computer. We're building mobile apps.
And I know whenever people think of mobile shopping apps, our minds go back to 2010 where everybody launched a mobile shopping app and it was just a web version of their website. There was no true value. We're completely changing that. We're really focusing on providing as much value to the customer, the end user, and to the brand in terms of data and retention, getting that shopper to shop over and over again. So, that's what we're focused on. Of course, we've got AI-powering the entire thing, solving a lot of the problems that previously we'd throw people at. We have some amazing tech, we've got almost 30 people on the team now, and it's only been one year. It's crazy.

Meera Oak:
That's wild. And I have to call out that I'm one of those crazy people, Ross, that makes some of those big purchases on my phone now, just because of the ease with which companies have brought that to me as a consumer. So, I'm calling myself out here.

Ross Correia:
I love it. And that just means it's getting better and better. Because I think five years ago, if you were to think, "Hey, I'm going to book this flight ticket on my phone." People would be like, "You're crazy. Don't do that." But now everyone's doing it. It's getting better and better and better.

Meera Oak:
That's awesome.

Samantha Herrick:
All right, and we are going to take a few seconds and hop over to Reactiv's fairly new YouTube channel. Now they have sat down with some of the companies and some of the e-commerce innovators that they work with, and have just talked to them about their business and how Reactiv has helped them grow and innovate in this e-commerce space. So, I'm going to share a clip from Reactiv's YouTube channel. This is with the CEO behind Med School Bro. Yep. You heard that right. The company's name is Med School Bro. But they're a really cool company.
They help provide med students and any people who are looking to get into med school with study supplies. Being within the social media space was huge for them, because most of the time their customers are already using the social media. So, Reactiv really helped them cultivate their system, or their business, or their shopping sector within these spaces where their customers are very frequently. So, I'm going to turn my mic off and let Reactiv and their client and Med School Bro, take over from here. But just sit back, relax and enjoy.

Brandon Portnoff:
My name is Brandon Portnoff and I am the co-founder of Med School Bro. Med School Bro is a influencer creator brand. We sell educational resources, study guides, flashcards, PDFs to med students all over the world. There's a lot of old and archaic textbooks in the current education system, and the industry has been ripe for innovation. And so, one of the things that we bring to the educational space, specifically with medicine, is a fresh, new fun way to study for your exams. And what we found is that it leads actually to better results than using the regular resources that have already been out there.
Most of the people being introduced to us are on their phones, so naturally when people are shopping on our website, they're all browsing on their phones. So, one of the first things we thought about was if most of our shoppers are already using their phones, wouldn't we want to give them a superior customer experience? Which is in the form of a mobile app, which is one of the reasons we wanted to build one. One thing I really love about the Reactiv team is it just feels like an extension of your team. So, working with them, they're super responsive. And honestly it's been really easy and there hasn't really been any learning curve or onboarding process per se. It's all been a super seamless transition.
The one thing about Reactiv Clips that piqued our interest was the fact that it actually reduced the friction for shoppers to even have to download our apps. So, with the Reactiv Clips, we're able to give our shoppers that mobile experience and without them actually having to download the app, they of course can after if you want, but removes that friction. The other great thing is that we're able to also send push notifications to people who use the app Clip. So, it will work really great with things like abandoned cart and abandoned browse push notifications, where a lot of the time when someone goes to our website, we don't have their email, so we can't send an abandoned cart or an abandoned browse email, we lose them forever. But with Reactiv App Clips, we can actually capture that potentially lost business.

Meera Oak:
Very cool. I think actually one of the first things that really struck me when we first met was your founding story. And so I'd love to hear a little bit about you and your background, or I'd love to share that with our listeners. And also, I wanted to call out the dynamic that you have with your co-founder, Zack. So I just would love for folks to hear how Reactiv came to be, and then a little bit of how you and Zack got to know one another.

Ross Correia:
I would love to. So, I've been in the e-commerce space for over 10 years now. It's all I know for better or for worse. I used to be a merchant when I first started, I was in the food space. I do not recommend that to anyone. If you're in that space, I sympathize with you. It is so tough. We were making a beef jerky product and it was no preservatives, no sulfates, no nitrates, which means it just goes bad really quickly. And we tried to sell that on grocery store shelves. You can imagine where this story ends. At grocery store shelves it costs so much money to get your product there, so we pivoted and we started selling online. And I found Shopify, and I was like, "This is the greatest tool ever."
I fell in love with Shopify rather than the product that we had. And a couple months later I found myself at a job at Shopify. I don't know how that happened. This is before people really knew what Shopify was too. I remember people were like, "What is this company you're joining? Who are they? Why are you working from home? Is it a pyramid scheme?" Nobody believed anything. But joined Shopify really early on, joining the support, or just wanted to get my foot in the door. And that's where I met Zack. So, I've known Zack for almost 10 years now. We both met at the trenches of Shopify. I remember we met at an offsite, actually, and a mutual friend connected us, and that was the end of it. We've met best friends ever since for 10 years now.
And so, was at Shopify. I was in support for a little while. I was on a marketing team that got to travel all over Canada, the US. Everyone thinks that's so glorious, but after you do that for a month or two or three months, it gets quite tedious. And then I joined the sales team. And I always said I never wanted to do sales, because in university I had a sales job for one of our carriers who were called Rogers, and it was the worst job on the planet. And I said, "I'm never getting into sales ever again." And, of course, my guru at Shopify, his name is Jamie. He was like, "No, you should try this, you should do this." So I did. Fell in love with sales, closed some of Shopify's biggest deals on the retail side back in the day, and spent about three years there.
I met my partner there, she's been at Shopify for nine years. So, all we talk about in our house is Shopify and e-commerce. And then I was a director for a public company in the payment space after that for a year and a half. And then Zack and I, we found ourselves together at another company building mobile apps. In the Shopify ecosystem we learned things to do things not to do. And then one year ago, it was September 2023, we decided to found Reactiv. And our goal was to take all the problems, everything we've learned in 10 years, dilute it down, think of where the market is going and put everything into it. And we've risked everything for it. People call this crazy, but here we are.

Meera Oak:
Oh my gosh. I love... Well just a few acc-outs. I think it's so interesting how people, I don't know, maybe it's concern that they expressed when you were initially thinking about joining Shopify and now think about where it is today. And also, I love the fact that you were hesitant, or not hesitant to join sales, but uncertain of whether or not that would be your path. Because now knowing you are, so it feels so natural to you and you're such just a natural storyteller. So I think it's awesome that you were able to find your way there.

Ross Correia:
Thank you. It doesn't even feel real some days. It's all culminated to Reactiv.

Meera Oak:
That's amazing. And I think you actually teed me up perfectly, because where I wanted to shift a little bit more was towards the product and a little bit more towards the market. And I think you mentioned the 2010 era in your introduction. When I think about e-commerce booms, I think the COVID era, a little bit more recently, and this incredible shift that brands made to embracing e-com, mostly because that's where their consumers really wanted to find them, like myself.
And I think with that type of saturation, understandably, we saw this surge in customer acquisition costs from the brand side. And I think that was this constant complaint, this frustration that how are brands expected to compete when the costs are just so high? And that's what I think was so exciting about the Reactiv opportunity to me. And so, I think it'd be great to unpack a little bit more about how you thought about Reactiv in meeting this moment, and why build within the mobile app platform space, broadly speaking.

Ross Correia:
I hope, and fingers crossed and knock on wood, we've done a lot of research, but I truly believe mobile apps are going to be the future. And I know when I joined Shopify, it was the same thing. I said, "Everyone's going to start shopping online." I thought retail. And that has been the case to a certain degree. I think e-commerce has definitely spiked, but I think I see the same pattern with mobile apps. And this is a crazy fact, and a lot of people don't know this, but in 2022, Apple released a state of affairs for the App Store. And in that they broke down all of the sales from all of the apps inside of the App Store. And this is just for Apple. And in 2022, I don't know, take a guess, Meera. How many millions or billions or trillions do you think Apple's apps processed in 2022?

Meera Oak:
Oh my gosh. I don't even know. For percentage-wise, I don't know.

Ross Correia:
You're like, "This is being saved in history."

Meera Oak:
I know. I'm like, "This is going to be cemented." No. Probably from a percentage perspective. Oh gosh, at least 60, I don't know, high 60s, 70s.

Ross Correia:
Okay, so it's crazy. And no one knows this, and it's on the web, you can go and find it. So, in 2022, the apps processed over $1.1 trillion-

Meera Oak:
Oh my God.

Ross Correia:
In GMP. It's a lot of money.

Samantha Herrick:
Ross is right. That is a massive amount of money. Now, I want to try and help you all visualize and contextualize how much money that is in terms of the federal government. The US government borrowed $1.1 trillion in just the first six months of fiscal year 2024. Interest payments on the US national debt crossed the 1 trillion mark in 2023. NVIDIA, one of the world's most valuable companies has a market capitalization of about $1.1 trillion. If you were to spend $1 million every day, it would take you about 3014 years to spend $1.1 trillion. So, if $1.1 trillion were in a hundred dollars bills, it would weigh, this is a real stat everyone. It would weigh approximately 11,000 tons stacked.
This one's even crazier. This one's easier to conceptualize. Stacked, these bills would reach about 689 miles high. Let's figure out how long 689 miles is. So, let's do this. Okay, so 689 miles. Boston to Washington DC is approximately 440 miles. 689 miles is about a one and a half times that distance. Boston to Miami, roughly 1,250 miles. Therefore, a 689 miles is about halfway to Miami from Boston. For all of you runners out there, a marathon is about 26.2 miles long. Therefore, 689 miles is equivalent to running approximately 26 marathons back to back. If you were to walk at a pace of three miles per hour for eight hours a day, it would take you about 29 days to walk 689 miles without any rest days.
Hope you enjoyed that little divergent there. We're going to do an ad and then we'll be right back.

Speaker 4:
Do you have a venture capital portfolio of cutting-edge startups? Without one, you could be missing out on enormous value creation and a more diversified personal portfolio. Alumni Ventures, ranked at top 20 VC firm by CB Insights, is the leading VC firm for individual investors. Believe in investing in innovation? Visit av.vc/foundation to get started.

Ross Correia:
If you look at that number, it actually goes up 30% year over year. And no one really talks about it. People are mostly focused on the web. And then if you break that down further and you remove things like flight tickets, because of the crazy people, and you remove things like games, and you remove all sorts of other stuff, and you just focus on commerce. So people buying things, CPG products or things they want for their home, it's the lion's share. It's over $600 billion in revenue. And again, it keeps growing 30% year-over-year. So, our focus with Reactiv is really to be where customers want to be in the future. And I think when we look at the new customers too, the new shoppers, we look at Gen Z, they want to shop on their phone, they do everything on their phone.
It's crazy when I tell people the story about Reactiv and what we're building, and I talk to people our age at a bar, or a party, people are like, "What you do?" And I explain it with Amazon in mind. And then when I talk to my nephews who are 10 and 12 years old, they're like, "Oh yeah, shopping apps. Coolest thing ever. Which apps can I shop to these apps?" And that's the future that we're going to and we want Reactiv to be the company powering it.
Whether you're a small SMB who's just getting started and you want to focus on getting a customer and you want them to shop over and over again, or you're a massive brand, like Nike, or Lululemon, or Zara, one day. Instead of spending millions of dollars to manage your own team to manage an app, you can use a platform like Reactiv, you get 90% of what you want, and then you use our SDK to build the final 10% on top of. It's pretty cool.
So, we're breaking all the rules. We're boiling the ocean, we're going after small, mid, large, but for some reason it's working. So, we're pretty excited about that.

Meera Oak:
No, I love it. I think that's actually part of the magic here is it has such broad appeal across different size brands and customers. So, I think, it's no surprise, I think to me that it's catching fire here. And speaking of catching fire, I know that you're coming off of a very big announcement and at the companies seed fundraise, the product launch. I'm not even going to let myself speak to this, so I would love to hear, and I'm sure listeners would love to hear the specifics and what you're hoping to accomplish with this funding.

Ross Correia:
We're super excited. So, one year, we're going on one year now, and we've managed to close a pre-seed and we closed the seed as well in this awful market somehow. But we've been pretty lucky. Again, we broke all the rules. I would not recommend our playbook to anyone, but we're coming off of a big seed round that we just closed in July. I think I'm allowed to say. So, Bonfire Ventures led the round. We got Foxe Capital, Daher Capital. We've got the lovely floats of Alumni as well, part of our biggest seed round. And our focus here, so we think of Reactiv and our future in horizons. And the first horizon for the company was really the first year. So, building a team, an amazing team, building a incredible product.
And I know when we talk about Reactiv, people are like, "What is it? It's just mobile apps?" But it's actually a dashboard where a merchant, a business owner can go in and they can customize their app, they can make it look and feel however they'd like. And something we learned about being in the app ecosystem for a long time is people actually hate to do that. They hate to manage multiple CMS solutions. So, you're managing how your web looks now, you're managing how your app looks, you're managing social media. You've got all these channels and you want it to look and feel the same. So, if a customer is coming to any one of your channels, they get the best possible experience. So then we built an AI tool that'll actually build the app for you and it'll update your app based on your website, and that was a lot of work. And then we built these incredible super performative mobile apps that people love to use, and they're fully accessible.
So, if you have a customer who's using an extra-large font, or someone who can't actually see their screen, we support a reader and things that'll read to you, that's fully accessible. We're actually the only company in the market that's doing that with mobile apps. And we think that's super important as well. So, you've got your app, you've got your dashboard, you've got your data, your reporting, you've got push notifications, you have AI that powers your push notifications. Our first chapter, our first horizon was around building that product and then finding about 10 to 15 customers that wanted to use that off the get-go. And so, we launched earlier this year with about 15 customers in private beta, and we went from zero to over a hundred grand in ARR, even higher almost in a day. And everyone was like, "Wow, that's amazing."
But what was really cool was when we looked at the data, all the hypotheses were true. So, AOV was up about 30%. Conversion was up. If a customer purchased in the app for the first time, they were twice as likely to repurchase then if a customer went to the web for the first time. So, we were seeing all the metrics as a business, but our merchants were also seeing all the metrics, which is just as important, if not more important than our metrics. We started to do a lot of that proof points. We had a lot of assumptions and we got a lot of feedback from our first customers, so we iterated a lot of those feedbacks. And one of the biggest things in this ecosystem, so if you're thinking about building an app today, you'll know that you can go and use a cookie cutter platform, and you're confined to what that platform allows you to do. Or you go with an agency and you spend millions of dollars, and you get the world is your oyster, do what you'd like.
Reactiv bridges those two. So we give you a platform to do about 90% of what you want, and then you can actually partner with an agency that is allowed to use our SDK and build on top of the app. So we actually have three massive agencies in the Shopify ecosystem building mobile apps for customers for the first time ever. We're doing it on the merchant side, the partner side, we're really trying it all, and everything seems to be working. So, our next focus now with all this funding is to continue to grow the team. We've got about 30 people on the team, which is probably insane, but we're probably going to grow that team. We're going to add more engineers to the team so we can build faster, we can integrate quicker, we can push new features, we can push the things that customers need and want very quickly. And we're going to build out a sales team, of course.
Time to go after the market, time to share the word of Reactiv. We're building out a marketing team, but our focus here is to double down on this product market fit. It's to show that there's scale behind this. And we plan to do it in a record-breaking time, about a year. And we plan to raise series a year from now as well. So, it's been crazy.

Meera Oak:
That's crazy. I know. And I think something that I was really struck by was just the price point that's required to even secure an agency, that already excludes so much of the market. It's so cost prohibitive at that point. And so, I think Reactiv is really offering not only a better solution, in my mind, but also to a segment of the population that was just underserved, candidly, just really had no way of building these capabilities and reaching their target market, otherwise. So, I think that's so exciting, Ross. We're thrilled to be a part of the journey.
And I think something I wanted to close out with a little bit was just the best way for our audience to engage with you and the Reactiv team. And who are you hoping to connect with as you, again, add fuel to the fire with this round?

Ross Correia:
I think the biggest thing for this round is to get in front of more merchants, in front of more businesses to show them what we can do. I think when people think about a mobile app, if we ask most business owners, "Hey, would you like to have a mobile app?" They always say yes, but there's a but, and the but is what is the percentage gain I can expect? What is the strategy that I need to have? How much time is this going to cost me? And for a lot of businesses that even do decide to build a mobile app, they don't have that app strategy in mind when they decide to do it.
An example of this is we'll work with a large business, they'll launch a mobile app, but they never had a strategy behind it, so they don't have a budget. So now no one's creating content, no one's sending notifications, and it remains stagnant. But in the best possible cases, we see merchants absolutely crushing it. Numbers that you won't even believe are true. And so, our big focus now is to get in front of as many merchants as possible, but to also help them with the app strategy. That's Reactiv's job too. So we provide the software, but we want to help you with the strategy behind the scenes. And we've worked with apps for a long time now. We know what works, we know what doesn't work.
We're actually taking all the data from our apps and we're using AI to figure out what's working with customers, what's not, and we're doing it hyper segment... We're segmenting down to the individual user. So, if we notice your profile, Meera, is similar to someone else's, we'll try and run the same campaign for you automatically, taking out someone having to go in there and do it all for you. But our big focus is on getting those merchants, talking about app strategy, getting them bought into that strategy from the beginning and then showing them the value one month in with their app. It's cool. It's really fun to change people's opinions as well.

Meera Oak:
Also, one month in, just a knowing, again, on across the enterprise spectrum and what feedback loops look like. Just seeing that ROI 30 days in is just so powerful for a brand that, to your point, is keeping such a relatively lean budget and wants to ensure that each incremental dollar is spent in the right way. I think that's incredibly powerful.

Ross Correia:
We have this, it's been really cool to do within a month because we have this superpower with App Clips. I don't know, I think most people when we talk about, we say, "What are App Clips?" No one knows what we're talking about. But an App Clip allows you to open and run a mobile app without ever installing it. So, if you're on Instagram, you're on social media, you get a message from your partner. Today, if you click on it, it usually goes to a landing page where you can see the product from the ad. But with Reactiv, when you click on that ad today, it'll actually open the app for you automatically without you ever having to install it. It's really cool.
And when you go into the app, you get the best version. You get the highest-quality content, it's buttery smooth, there's no pop-ups, there's no ads. It just works every time. And as a business, you get the data, you get to see what your customers are looking at, and you get to send them notifications. It's this win-win. And it really allows us to compare apples to apples. Because I think for a lot of people too, when you think about app data, of course, the app data is going to be better because the most loyal, your best customers are going to install your app. But with App Clips now, we get to compare apples and apples, because it's not up to the customer anymore. It opens directly in the app. So we can compare a customer going directly to the web landing page and someone going directly to the app landing page, and the data is just incredible.
So, we're excited this holiday season to launch with a ton of merchants and see what that data is, and then we'll make changes and push those changes in the new year.

Meera Oak:
Amazing. Ross, thank you so much for joining us. This has been such a treat for me and also for our audience. So, thank you so much and I really appreciate the time.

Ross Correia:
Thanks for having us, Meera.

Samantha Herrick:
Thanks again for tuning into the Tech Optimist. If you enjoyed this episode, we'd really appreciate it if you'd give us a rating on whichever podcast app you're using, and remember to subscribe to keep up with each episode. The Tech Optimist welcomes any questions, comments, or segment suggestions. So please email us at info@techoptimist.vc with any of those, and be sure to visit our website at av.vc. As always, keep building.