When Danielle Schmelkin went shopping online for something special to wear to her niece’s wedding in 2021, she was looking for “a very specific type of dress based on trends I had seen recently.”
In less than a month, Madewell saw a 3% increase in purchases from online searches, according to Schmelkin. Lily AI is now used across the J. Crew Group, and each brand continues to see “meaningful increases,” she said, adding, “Lily AI is the real deal.” Those results have helped Lily AI attract investors. Canaan Partners was the lead partner in Lily AI’s $25 million Series B financing in 2022, which brought the company’s total raised to $42 million.
The idea for Lily came in 2013 after Gupta, an economist, moved to the United States with her husband, an MBA student at Yale. She went searching for “a flowy beach dress with sleeves” in stores around New York City and in online searches, only to keep striking out. She considered that language might be the barrier, she said, and wondered, “Was this an immigrant problem I was having?”
Her husband encouraged her to go to Palo Alto, California, to the Founder Institute, an idea-stage business incubator. There, she met Chocka Narayanan, a software engineer who left India in 2008 to pursue a master’s degree at the University of Texas at Austin. But it became apparent that the trendy phone app wouldn’t be scalable, and the partners shut it down, recasting their search-and-shop model for major fashion retailers. Lily AI was born.