Retailers have spent the past two decades digitising supply chains and online shopping. However, the in-store experience, still the beating heart of brick-and-mortar commerce, remains largely analogue. A Seattle-based startup, Ethosphere, found the missing link: AI-powered coaching for store associates, delivered by listening to the conversations they’re already having on the floor.
The company today raised a $2.5 million pre-seed round led by Point72 Ventures, with participation from AI2 Incubator, Carya Ventures, Pack VC, Hike Ventures, and J4 Ventures.
The capital will go toward expanding pilots with large retail chains and scaling its voice AI platform.
Turning conversations into coaching
In an exclusive interview with TFN, co-founder and CEO Evan Smith explains: “What we do is fairly straightforward but novel. We use microphones in retail environments to capture conversations between associates and customers, then use AI to give associates personalised coaching, provide managers insights on who needs support, and give brands visibility into store performance. We’re essentially turning every customer interaction into a learning opportunity.”
Smith’s career path informs this vision. Before joining Starbucks, he spent years in K-12 education, working in schools and districts, followed by a stint at McKinsey & Company and a series of e-commerce startups. At Starbucks, where he spent seven years, he helped launch the company’s delivery business and later served as VP of Technology Strategy. It was during this time, working closely with Microsoft and witnessing the rise of ChatGPT in 2022, that he realised how AI could be a force multiplier rather than a job replacer.
“The greatest predictor of a high-performing retail store is its manager. And when you ask managers what matters most, nine times out of ten, they’ll tell you it’s coaching their people. But they rarely have time for it: they’re putting out fires all day. I saw AI as a way to give these managers the superpowers they didn’t have,” he says.
His co-founder, CTO Ahad Rana, brings two decades of engineering experience from Google, AWS, and AOL, giving the company deep technical expertise in distributed systems, big-data infrastructure, and AI applications.
Ethosphere’s eight-person team spans five countries. Smith notes, “We know that diversity leads to a diversity of thinking and approaches. It makes products and culture stronger when different viewpoints inform the product and the company you’re building.” The team maintains broad gender balance and intentionally leverages different viewpoints as strengths.
A human-first approach
“In an increasingly busy landscape flooded with theoretical AI, Ethosphere stood out with a practical, powerful application. We think their focus on augmenting, not replacing, human interaction is a critical differentiator,” adds Sri Chandrasekar, Managing Partner at Point72 Ventures.
So far, Ethosphere does not see direct competitors, though Smith admits investors often compare its model to revenue intelligence tools used in enterprise sales. “The difference is, we’ve built this for in-person retail interactions, where the stakes are different. You can’t hit rewind on a customer walking out of a store,” he says.
That focus positions Ethosphere to expand alongside retail partners ranging from 100 locations into the tens of thousands. By 2026, Smith expects the platform to support thousands of frontline associates. Over the longer term, he believes the technology’s application could extend beyond retail to other sectors that rely on face-to-face customer engagement.
“Retail is the largest private-sector employer in the economy. Post-pandemic, with a new generation of employees entering the workforce, the industry needs to rethink how it supports associates. What drives us is giving people greater confidence and joy in their jobs,” Smith concludes.
