Daydream: Transforming online shopping with AI

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(4 minutes)

• This AI startup is planning to revolutionize fashion e-commerce forever

• They’ve already signed up 2,000+ retailers including Jimmy Choo and Alo Yoga

• They raised a $50M seed round last week from VCs including Google and Index Ventures

So what’s the startup and who are the founders behind it? Here’s the story of Daydream 👠:

Daydream was founded in 2023 by Julie Bornstein, Matt Fisher, Richard Kim, Lisa Yamner Green and Dan Cary.

The platform lets you search for products using Natural language processing and Image recognition. 🤖 

How it works is you type in a query like “I’m going to Portofino for a wedding this summer and I need suggestions on what to wear” 🌊 . You can even upload images and ask for another filter like “I want this in blue”.

Daydream not only makes online shopping easier and streamlined, it makes the experience more inspiring, personalized and enjoyable.

So, how did it start?🐣

Julie Bornstein had been an avid shopper from a very young age, knowing the ins & outs of shopping malls. 

She’d always been into fashion and business, having even done an MBA at Harvard Business School. 👩‍🎓 

About 20 years ago, Julie landed a job as a business development Director at Starbucks. While working there, e-commerce had been on the rise and she’d been watching it closely📈. The first time Julie saw amazon.com, her mind exploded with e-commerce ideas around what could be done with fashion.

At about the same time, Julie heard that Nordstrom was launching an e-com store and was super intrigued. She spent 6 months convincing Nordstrom to hire her and ended up staying there for 5 years as VP of e-commerce.

She turned their online business from $0 to $350M in sales in their first 5 years, while turning it profitable💸.

She went on to head e-commerce at Urban Outfitters and Sephora LVMH as their Chief Marketing Officer.

Julie then moved to Stitch Fix - a fashion-tech startup which helped elevate the shopping experience using personal stylists. Julie helped scale the startup to over $1B in sales as COO💰.

Julie still felt the shopping experience was missing something. For example, you still had to make guesses about what would sell and what wouldn’t and do things like build photo studios to reshoot clothing samples to put up on the website.

The tech in fashion was still fairly limited and she had so many ideas in the back of her mind but couldn’t execute on them.

She’d felt that there was a different business model out there where customers could shop for themselves but have the advantage of a personalized algorithm.

In 2018, Julie founded THE YES  to create a better, more personal shopping experience for the customer driven by AI 🛍️. The platform was a personalized shopping feed that learns the user's style as they shop.

THE YES went on to raise $30M in funding and was acquired by Pinterest for an undisclosed amount.

Julie stayed on at Pinterest as an executive and advisor for about a year before finding another problem with online shopping…

Daydreaming 😶‍🌫️ 

E-commerce is now more fragmented than ever. Brands are selling on so many platforms from Tik Tok Shop to Amazon and even live shopping. You’d think it’d be easier for shoppers to find what they’re looking for but this isn’t the case at all. Shoppers spend a ton of time searching⏰.

Daydream fixes this with an AI-powered online shopping search platform that allows users to describe what they’re looking for, receiving personalized results for women’s and men’s fashion.

Julie found other co-founders which brought diverse but complimentary skills including technical and AI expertise at Microsoft, Amazon, Google,retail and the fashion industry👠.

The startup fine-tunes off-the-shelf models and creates a detailed dataset of product catalogs combined with the team's understanding of fashion.

Their product hasn’t officially launched yet, but they’re planning to launch their beta version to consumers in the US this fall.

So how are they making money? 💸 

Daydream already has almost 2,000 multi-brand and mono-brand retailers signed up including Jimmy Choo and Alo Yoga 🧘‍♀️ .

The startup doesn’t plan on fulfilling orders themselves, just act as a layer for shopping and rely on commission-based revenue. They don’t have any plans on making ad-based revenue yet.

💰On June 20th 2024, Daydream raised a $50M seed round from VCs including Index Ventures, Google Ventures, Forerunner Ventures and True Ventures.

Bornstein said they raised the money to be used to hire engineering talent and scale fast.

The startup also plans on growing from now, 23 employees to 35 by the end of this year📈.

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