Quebec’s Coveo buys Silicon Valley startup to help retailers sell to AI agents

Technology firm Coveo Solutions Inc. CVO-T has bought a Silicon Valley AI startup that helps retailers and brands compete for the attention of shoppers’ AI assistants, bolstering its software capabilities as it seeks more big-name clients.

The Montreal-based company’s purchase of the San Francisco-based Anglera for an undisclosed amount is its first acquisition in five years. The two-year-old startup’s technology uses AI to evaluate a customer’s product catalogue, filling in and fixing the data drawn from their own and suppliers’ systems. In early tests with clients, Anglera claims its technology has boosted sales and improved margins every time shoppers visit their online stores.

More accurate information is crucial for retailers and brands as more consumers delegate the task of finding products to AI assistants, Coveo CEO Laurent Simoneau said in an interview. “If you have the wrong data, you’re not going to serve those agentic commerce experiences.” Agentic AI refers to systems that can do tasks for users instead of just answering questions.

Coveo’s technology sits between AI models and customers’ data, helping chatbots and agents give better responses and complete tasks more effectively. Clients include retailers like the Liquor Control Board of Ontario and Famous Footwear, manufacturers like Dow Inc. and Honeywell International Inc., and tech firms like Dell Technologies Inc. and Xero Ltd.

Customers also use Coveo’s AI tools to power the search functionality on their sites. The technology applies behavioural data to visitors’ search queries, letting it more accurately predict what they want. The firm had been considering building a data-enrichment system similar to that of Anglera’s, but opted to buy the startup because it was already showing positive results, Mr. Simoneau said. “This product that they have is ready to be sold today to select customers.”

Former Uber product managers Ray Iyer and Amay Aggarwal founded Anglera in 2024. The firm went through Y Combinator, the famous Silicon Valley accelerator. Anglera’s five employees will join the Canadian firm’s 800-person workforce.

Mr. Simoneau said he expects Anglera’s technology will eventually generate new revenue for Coveo in the retail and industrial markets.

Anglera is Coveo’s first acquisition since October, 2021, when it bought Qubit, a London-based firm that developed AI personalization technology. Coveo is focused on growing revenue organically by adding new customers, but “when we see great tuck-ins like that, we look,” Mr. Simoneau said.

The deal is the latest example of established Canadian tech firms buying startups to add new technology or talent. Earlier this week, Burnaby, B.C.-headquartered Clio, which makes legal AI tools, acquired Page, a regulatory monitoring platform based in Waterloo, Ont. Shopify recently bought several startups, including Vantage Discovery, a San Jose, Calif.-based firm that also focused on AI search for retailers.

Coveo staged its initial public offering in November, 2021, raising $215-million and making it one of the only publicly traded Canadian AI companies. Coveo was among several Canadian technology firms to list at the time, amid a post-pandemic stock rally. But it’s one of the few still on the public markets, after many of the others in its IPO class were taken private by private equity funds.

Coveo’s stock has often struggled in the years since, with the share price down 27.3 per cent this year to $4.77 as of Thursday’s close.