BOSTON, MA — Proton.ai, the leading AI-powered growth platform for wholesale distributors, announced Jan. 18 that it closed $20 million in Series A funding led by Felicis Ventures. Proton.ai helps distributors compete in the increasingly digital world with an AI-powered sales enablement solution created for the unique dynamics of B2B distributors.
“We are excited to partner with a company that’s poised to transform the massive and critical distribution industry,” said Niki Pezeshki, general partner and managing director at Felicis Ventures. “There are approximately 700,000 wholesale distributors in the US, with 32,000 of them doing more than $10 million a year in sales. Digital tools are desperately needed to modernize the sales stack for these distributors, so we believe there is a tremendous market opportunity for Proton’s solution.” Pezeshki will be joining Proton’s board.
Also participating in the round were leaders in enterprise SaaS and distribution, including Battery Ventures, Abstract Ventures, MSC Direct, and J Ventures. Technology angels include Godard Abel, CEO of G2; Ray Grady, CEO of Conexiom; and Rob May, General Partner at PJC. Distribution angel investors include Mike Page, CTO/CMO of R.S. Hughes; Jonathan Bein, partner at Distribution Strategy Group; and Michael Marks and Michael Emerson, partners at Indian River Consulting Group.
Proton’s platform connects and centralizes distributors’ customer, product, and transactional data that is dispersed across many systems. It then analyzes that data in real-time with deep learning models and produces AI-powered product recommendations that help distributors grow their sales.
“Proton customers average a 17x improvement to gross margin and 5%-10% bump to top line sales,” said Benj Cohen, founder and CEO of Proton.ai. “Because we’re focused on an industry that’s responsible for 28% of the U.S. GDP – or more than $6 trillion annually – we believe our technology can be a disruptive force for the B2B market.”
Cohen learned first-hand the challenges of distribution through his family’s business, Benco Dental, the largest private dental distributor in the United States. He believes distributors have been chronically underserved by technology. Cohen founded Proton.ai to rectify that.
“Distributors face tremendous pressure to deliver an exceptional omnichannel experience for their customers – a need that's heightened by competition from online-only players like Amazon,” said Cohen. “Delivering this experience is extremely challenging due to the complexity of managing tens of thousands of SKUs across fragmented systems, resulting in distributors missing hundreds of billions in sales annually. Proton cuts through this complexity by identifying which customers need which products, and empowering salespeople to act on this information.”
According to Cohen, Proton intends to leverage the infusion of capital to further invest in three areas: aggressive product development and enhancement, building out a world-class customer success team, and expanded sales and marketing capacity.
Proton’s SaaS platform saw its monthly recurring revenue increase by 241% over the past year. The company currently has a net revenue retention of 199%.
“Proton has been highly successful for our Customer Care team,” said Erik Gershwind, President & CEO of MSC Industrial Supply Co. — No. 8 on Industrial Distribution's 2021 Big 50 List. “The AI-suggested product recommendations have helped generate a significant lift in annual revenue from inbound calls. As a result, we are looking to extend the deployment of Proton to other areas within our Customer Care team. Prior to Proton, we used an internal system to help our sales reps generate incremental revenue from existing accounts. When we piloted the Proton solution, we found that it delivered substantially more attributed revenue than our incumbent system, making the implementation of Proton an obvious decision.”
Proton is an AI-powered growth platform, purpose-built to increase revenue for distributors by helping sales reps and customers navigate the complexities of managing lots of products through multiple channels. Proton helps distributors grow revenue by 5%-10%+ and gain market share. For more information, visit proton.ai.
Founded in 2006, Felicis Ventures is a venture capital firm investing in companies reinventing core markets, as well as those creating frontier technologies. Felicis focuses on early stage investments and currently manages over $2.1B in capital across 8 funds. The firm is an early backer of more than 41 companies valued at $1B+. More than 91 of its portfolio companies have been acquired or gone public, including Adyen (IPO), Credit Karma (acq by Intuit), Cruise (acq by General Motors), Fitbit (IPO), Guardant Health (IPO), Meraki (acq by Cisco), Ring (acq by Amazon), and Shopify (IPO). The firm is based in Menlo Park, CA. Learn more at www.felicis.com.