A startup founded by three former Spotify engineers has raised $10 million in seed funding to apply real-time behavioral AI to online retail. The company, Malachyte, announced the round in August 2026, with funding co-led by Bessemer Venture Partners and Gradient, and participation from Harpoon Ventures.
Malachyte was founded by Sidd Motwani, Ian Anderson, and Shivaditya Sinha, who previously built the behavioral intelligence infrastructure behind Spotify’s recommendation engine — a system called Vector AI that powers roughly 90% of recommendations to the platform’s 800 million users. Their new platform adapts a similar approach for e-commerce, using what the company calls “two-headed Vector AI” to predict shopper intent, learn individual preferences, and update recommendations continuously based on in-session behavior.
The core idea is that most online stores rely on historical purchases, demographic segments, or logged-in profiles to personalize the shopping experience — leaving first-time visitors with generic storefronts and returning customers with recommendations based on past behavior rather than current intent. Malachyte’s system begins building a shopper profile before the first click, using signals such as hovers, scrolls, search queries, and add-to-cart actions to adjust what products appear in real time.
“A search for ‘heavy-duty boot’ followed by two clicks on steel-toed boots is enough to move work pants and gloves up the page and push dress shoes down, with no account or history required,” CEO Motwani told TechCrunch.
The company has been developing and testing its technology since 2024, working with more than 20 enterprise customers across travel, grocery, and retail before narrowing its focus to e-commerce. Its platform first went live in fall 2025 with Fun.com. As of June 2026, it is generally available to Shopify merchants through a native integration, with an API option for larger retailers.
Malachyte plans to use the seed funding to scale distribution and hire additional product and commercial leaders.
Source: TechCrunch