Ex-Spotify trio raises $10M to bring recommendation AI to retail

Three former Spotify engineers — Sidd Motwani, Ian Anderson, and Shivaditya Sinha — spent years building the behavioral-intelligence infrastructure behind the streaming service’s recommendation engine, known internally as Vector AI. The system predicts what a listener will do next rather than relying only on past behavior, and powers about 90% of the recommendations Spotify serves its 800 million users.

The trio is now bringing a similar approach to online retail through their new startup, Malachyte, which said Thursday it has raised $10 million in seed funding to scale distribution and hire more product and commercial staff.

Malachyte was built on the idea that most online stores treat every shopper the same way, leaning on past purchases, demographic segments, or logged-in profiles. That leaves first-time visitors seeing a generic storefront, while returning shoppers get recommendations based on what they bought before rather than what they need now. The startup’s platform, which it calls “two-headed Vector AI,” instead tries to predict what a shopper wants next in real time, learn their general taste, and continuously refine that read based on what they do in the moment — no account or purchase history required.

“Every hover, click, scroll, search refinement, and add-to-cart is a signal, and most systems either never act on it in the moment or aggregate it into a segment overnight,” Motwani, Malachyte’s CEO, told TechCrunch. “We read it continuously, so each action makes the user’s vector more confident about both preference and current intent.”

Motwani argues retailers already sit on their most valuable customer-intelligence source but rarely use it in real time, including contextual signals such as the device or time of day a shopper is browsing.

Malachyte has been developing and testing its technology since 2024, working with more than 20 enterprise customers across travel, grocery, and retail before settling on e-commerce as its focus. Its platform went live with Fun.com in the fall of 2025, and since June 2026 it has been generally available to Shopify merchants through a native integration, with larger retailers able to integrate via API. Motwani says the bigger long-term opportunity lies in bringing merchandising and marketing together around a shared understanding of customer behavior.

The round was co-led by Bessemer Venture Partners and Gradient, with participation from Harpoon Ventures.

Why it matters

As e-commerce personalization shifts from historical purchase data to real-time behavioral signals, startups repurposing recommendation systems built at consumer-scale companies like Spotify could reshape how online retailers compete for attention and conversion.