Openmart Aims to Simplify the Process for Enterprises to Conduct Business with Local Companies

In 2020, while working as a product engineer at Pinterest, Kathryn Wu embarked on a venture to create a milk tea business named Ohtea, aiming to partner with local grocers and gift shops for distribution. However, she encountered significant challenges in locating and contacting potential retailers, a struggle that contributed significantly to the venture’s failure.

Wu shared with TechCrunch, “Achieving product-market fit eluded me. The complexity of gathering retail data was daunting. I was forced to use multiple tools, compile extensive spreadsheets, and ultimately, I realized the solution might lie in addressing this challenge myself.”

This ordeal inspired Wu to co-found Openmart three years later, a startup touted as the AI-powered alternative to Zoominfo, Openmart. Openmart leverages AI to extract data from public records, maps, customer feedback, and other information sources to create a comprehensive database of local businesses, sorted by category. It generates sales leads for users by collecting details such as business owner contacts based on user-defined criteria.

Richard He, who met Wu during their internship at Pinterest and reconnected in an Asian entrepreneurship circle, co-founded the startup. Their mutual affection for their dogs – a golden retriever for Wu and a lab for He – played a part in their partnership. He was keen to join Wu when he learned about her entrepreneurial plans.

The inception of Openmart was driven by Wu’s difficulties in mainstreaming her side project, yet the vision for the company evolved to serving larger enterprises facing similar issues with local business engagement, as discovered through their initial research. He explained that while they initially focus on local businesses, their ambition is to aid outbound sales across various sectors with AI.

Founded in the previous year and part of Y Combinator’s W24 batch, Openmart has already attracted attention with several paying trials involving both large corporations and growth-stage startups. Early adopters from their YC cohort became some of Openmart’s inaugural clients. Wu aims to cater to enterprise clients initially, with plans to serve medium-sized businesses in the future.

Openmart recently completed a successful $2.75 million seed funding round, supported by Y Combinator, Rebel Fund, Afore Capital, among others, as it moves out of beta. He emphasized the importance of setting realistic fundraising targets and resisting pressure to overextend, following guidance from YC partner Gustaf Alstromer to retain a significant ownership stake through future funding rounds.

“The calculation is straightforward,” He stated. The objective is minimal dilution and securing just enough capital to reach the next milestone.

He also noted that AI’s role in enhancing engineering productivity means the company can focus on a smaller, yet more effective engineering team rather than extensive hiring.

While Openmart currently prioritizes collating data on local enterprises, the plan is to diversify its offerings in the future. However, He indicated that despite plans for expansion, the core commitment will remain supporting small businesses, thereby establishing themselves as specialists in sourcing contacts for small to medium-sized businesses as articulated by Wu.