It has arguably never been harder for brands and retailers to acquire and retain a customer. Mass adoption of the internet, mobile technology and ecommerce over the past 20 years has led to consumers being inundated with advertising, promotional emails and product options. There is so much noise it’s hard for any brand to cut through it.
Customer acquisition costs have been on the rise for years, especially for direct-to-consumer (D2C) brands, as the cost of online advertising has increased. This has driven brands to look for alternative ways to connect and engage with consumers to build sustainable relationships and experiences. Over the last few years, SMS messaging has been recognized as the most direct vector to a consumer, because the phone number is the ultimate unique identifier in today’s digital world. The one-to-one communication offered by SMS and other messaging channels is more valuable, proven by higher open and engagement rates (consumers are 4.5 times more likely to reply to text messages than emails, according to Postscript) and desire by consumers to interact with brands via text (nine out of 10 consumers want to use messaging to communicate with brands, according to Twilio).
These market dynamics make York IE very excited to announce our investment in Voyage SMS, a Santa Monica, Calif.-based startup that is on a mission to create delightful experiences for consumers through SMS and other mobile messaging channels. The team at Voyage believes traditional digital marketing and ecommerce buying is too loud and full of friction. They have built an SMS marketing and message commerce platform that is focused on reducing friction by providing highly personalized experiences and minimizing the amount of steps it takes to go from discovery to transaction. The company states, “Growing, customer-obsessed brands use Voyage to quickly scale their SMS subscriber base, drive revenue and cultivate deeper customer loyalty.”
The core characteristic of Voyage SMS that attracted the York IE team most was the product-driven culture. This has been one of the building blocks of Voyage, driven by Co-Founder and Chief Innovation Officer Corey Epstein from day one and expanded upon by Co-Founder and CEO Rev Reddy.
Epstein, Reddy and the team deeply believe that large amounts of capital do not automatically solve product problems or result in innovation. They believe the ability to ship and innovate on product is very much intrinsically driven, and that starts with the DNA of a company’s leaders and their vision. York IE saw this as a true differentiator when evaluating the competitive market dynamics that Voyage is exposed to.
In 2015, Reddy co-founded Appriza Pay, a FinTech B2B2C startup that was majority exited to a strategic acquirer in 2021. Reddy’s experience in FinTech has a direct impact on the opportunities Voyage’s clients leverage using the platform to maximize return on investment and build rapport with their customer base. Reddy has been a consultant at McKinsey and Company and also earned his undergraduate and MBA degree from The Wharton School.
Epstein is the founder of DSTLD, a D2C men’s denim company that went public in 2021. His career focus on digital marketing and hands-on experience launching and scaling DSTLD drove his desire to build a marketing platform for sophisticated, data-driven marketers like himself.
Epstein and Reddy met through a mutual advisor in 2019. Epstein was incubating Voyage at the time, and Reddy was bootstrapping a music tech venture driven from his childhood passion for music. Reddy immediately resonated with Epstein’s vision around how SMS was going to change the way brands and customers interacted over the next decade.
Reddy and Epstein are surrounded by talented leaders on the Voyage executive team. Chief Product Officer Zach Holmquist was previously a senior director of product at WeWork, as well as CTO and co-founder of Teem, a flexible workplace tech startup that WeWork acquired for $115 million. Holmquist has a passion for building products from concept to completion and for growing customer-facing solutions. Chief Operating Officer Dave Link brings over a decade of B2B SaaS experience with multiple exits. His full-funnel approach to customer experience allows him to precisely connect marketing, sales and customer success to drive business growth.
Voyage’s platform is built on the vision that messaging should be more than an additional marketing channel and used to drive commerce and transactions. The demand from consumers for a more human experience online has never been more relevant. With the recent acquisition of LiveRecover, Voyage brings a human-in-the-loop (HTL) to capitalize on the two-way nature of SMS and create conversational—and delightful—experiences for consumers. Additionally, the Voyage team believes that it currently takes too many steps or clicks to go from discovery of a product to purchase.
To reduce the friction in this process, Voyage has built an extremely flexible SMS platform that empowers brands to micro-market at scale and increase conversions at the bottom of the funnel with features such as click-to-buy, which takes customers straight to checkout with dynamic link messages. The platform’s modern, flexible, event-driven architecture also enables more advanced marketing features such multi-message automations (drips) and the ability to create custom events on the user interface in seconds, and it also opens the platform up to a universe of integrations. Current integrations include Shopify, BigCommerce, Klayvio and Zendesk.
All of these features lead to a more customizable and personalized experience for the consumer and a stronger customer relationship for brands. This is demonstrated by the fact that Voyage customers have experienced an average of 30X return on ad spend (ROAS).
Based on macro trends it should come as no surprise that the SMS marketing and commerce market is large. Research and Markets projected that the global market for application-to-person SMS would reach $74.7 billion by 2026. Additionally, the Voyage team estimates that only 35% to 40% of brands are using SMS to engage with customers today. The York IE team believes that this shows significant greenfield opportunity, as well as a large opportunity to target brands using inferior SMS marketing and commerce platforms.
As with almost any large market opportunity, there is noteworthy competition in SMS marketing and commerce, with the most notable being from Attentive, a New York-based unicorn that has raised over $850 million in capital. Attentive’s success in fundraising and growth validate the idea that consumers are looking for a more direct and personalized channel to engage with brands, but the York IE team believes that Voyage’s product-first culture and vision of message commerce has led to distinct advantages that will enable the company to capture meaningful market share. The flexibility of the platform is loved by customers and makes it much easier to onboard and micro-market at scale. The focus on features for commerce over just marketing also leads to higher ROAS, which is one of the primary metrics Voyage’s customer base is concerned with.
Other competitors in the space include Emotive and Postscript. These companies are primarily targeting small and medium-size businesses, and Voyage infrequently sees them in deals. In the case of Postscript, its platform is tied to Shopify and available through its app store. Voyage has taken a broader ecosystem approach and is not solely tied to any one ecommerce platform.
Voyage is initially targeting D2C brands with $3 million to $100 million in revenue. This focus has allowed the company to accrue over 100 midmarket and small enterprise brands as customers and 2.5 million registered phone numbers, with one-third of them coming from other platforms such as Attentive. Customers include Fresh Clean Tees, Lokai, Birthdate Co., Moon Pod and AMASS.
York IE is extremely excited to partner with Voyage SMS and aid the company in its mission to bring more personalized and frictionless ecommerce experiences to consumers. The team’s obsession with their customers and product have put them at the forefront of innovation in their space and positions them to capitalize on large macro tailwinds.