A Middlesbrough start-up that promises to ‘revolutionise the way companies price their products’ has raised £650,000 from the Northern Powerhouse Investment Fund and private investors.
Bubo.AI’s platform uses artificial intelligence to analyse customers’ behaviour to understand what they are willing to pay, then recommends the optimum price to sales staff. The company also supports sales staff to avoid them giving unnecessary discounts.
The platform, which is designed for wholesalers and distributors such as builders’ merchants and food services, allows them to base their prices on customer value rather than cost or other methods. Bubo.AI has been co-founded by serial entrepreneur Alan Timothy and Polish data analyst Marcin Lisowski.
The two men joined forces with leading AI expert Professor Huseyin Seker of Staffordshire University, and ex-Microsoft marketing veteran David Shell to develop their ideas and create an off-the-shelf solution.
Bubo.AI, which was launched in 2019, is now used by clients including Tarmac, while the company has partnered with Teesside University and other institutions to promote the use of AI in pricing. The funding will allow the firm to scale its operations rapidly across Europe and North America.
Timothy, who is CEO of Bubo.AI, said: “Pricing has previously appeared like a dark art, and traditional approaches are problematic and not very effective. Trying to price match with competitors can lead to price erosion, especially in a downturn, while sales staff often resort to discounting to meet targets.
“Now for the first time our solution means companies can use customer value-based pricing, which could be key for them to recover revenue and build a roadmap to profitability in the post-Covid world.”
The Northern Powerhouse Investment Fund project is supported financially by the European Union using funding from the European Regional Development Fund (ERDF) as part of the European Structural and Investment Funds Growth Programme 2014-2020 and the European Investment Bank.