Threedium raises US$11 million in Series A Round investment from US giant IPG

In this exclusive interview, Mike Charalambous, Threedium’s Founder and CEO, and Sebastiano Mura, Global Business Leader at Craft Worldwide (an IPG agency) talk about how the investment will catalyse both companies' future and why gamified experiences are the future of e-commerce.

"When the universe conspires, things just happen. This investment was a mixture of luck, great timing, and good chemistry," says Mike Charalambous, the founder and CEO of Threedium, reflecting on reaching the milestone of a Series A round with a US$ 11 million investment by the Interpublic Group of Companies (IPG), one of the biggest providers of marketing solutions in the world.

Founded in 2017, Threedium’s 3D and AR engine has captured the trust of big brands across the board, from the electrified precincts of the automotive industry to the opulent rooms of luxury fashion and the comfort-laded expanses of homeware. At the heart of the startup’s growth lies a profound shift in the world of commerce – an incessant collapse of the once-discernible boundaries between the physical and the digital. Operating a bespoke 3D ecommerce infrastructure and software-as-service platform, brands can create 3D configurators where customers can choose the colour, size, shape and other product features. The platform extends to 3D web visualisation, showcasing products with captivating interactive 3D graphics that transcend the static confines of traditional displays. Meanwhile, brands can use the startup for augmented reality campaigns – digital objects superimposed onto a physical environment – unfurling a riveting vista of new opportunities.

When comparing real-time 3D displays to static images, Threedium consistently witnessed a remarkable surge of 100% to 160% in user engagement and dwell time, a testament to the allure of interactive, immersive experiences over passive viewing. Furthermore, these immersive experiences drove conversion rates upwards, with an average increase of 8% to 12%. Charalambous explains the correlation, "The more time users spend interacting with a product, the likelier they are to add it to their shopping basket. Our technology not only extends the time users engage but also intensifies their interest."

In 2020, Threedium initiated its strategic foray into the US market, with substantial support, both financial and advisory, from Kinisis Ventures – a cadre of Cypriot expatriates in the US established this dynamic venture, originally a business accelerator, now a thriving VC firm, to pave the way for Cyprus-based startups to access the vast American market.

Even as it grows, Threedium's unwavering mission since its inception has been to make its cutting-edge technology accessible. Charalambous elucidates this vision. "We aimed not only to empower tier-one enterprises but also to level the playing field for SMEs, providing them with the tools to craft robust, next-generation commerce experiences," he says.

Throughout the past half-decade and some change, the startup’s team, split between London and Cyprus, had held steadfast in this singular mission. This relentless pursuit, replete with myriad challenges, has cumulated into a simple, plug-and-play tool. Charalambous, reflecting on their progress, says, "To a large extent, we have achieved our mission, but there's still much room for growth.” Notably, the cost of engaging in at least one AR campaign has become significantly more affordable, dropping by a factor of five in the past year, with the startup’s trajectory pointing toward further cost reductions soon.

Gamified commerce

Threedium's connection to IPG started through Craft Worldwide, a subsidiary of McCann Worldgroup, IPG's global marketing services organisation, nearly two and a half years ago. The initial engagement was to gauge the transformative potential of the startup’s tools for the agencies’ clients. These tools incubated experiences in the metaverse that would eventually crystallise into what we now, in the ever-evolving lexicon of technology, more fittingly refer to as “gamification experiences.” This linguistic pivot also emerged as a necessary sidestep to avoid conflation with the likes of Meta (formerly known as Facebook) and their ilk. Nonetheless, in this new paradigm, gaming features, such as a sense of competition and achievement, meld into commerce following a strategic calculus designed to bolster customer retention and cultivate loyalty.

In August 2021, luxury fashion brand Louis Vuitton marked its founder’s bicentennial ‘Louis: The Game.’ This mobile game featured Vivienne, the brand’s mascot, on a quest to collect 200 candles and 30 exclusive NFTs by artist Beeple. With over 220 million downloads, it was one of the first tangible examples of how luxury brands can leverage gamification for growth. In another instance, Threedium and Craft Worldwide, in collaboration with McCann Detroit, showcased General Motors' electric vision at Metaverse Fashion Week in Decentraland in 2022. This immersive experience allowed users to explore and reserve GM's electric vehicles and socialise, bridging the divide between the physical and digital worlds.

Two birds with one stone

One of those tests meant to reveal Threedium’s potential was with Fendi, one of the startup’s most notable clients. The luxury brand approached Threedium with a dual challenge: maintain a sustainable process for launching and selling their new fur jacket collection while enhancing customer-facing personalization in-store.

In response, Threedium built a real-time 3D configurator for in-store use. Customers worldwide walking into the brand’s stores in Monaco, Tokyo, London, Paris or Milan could access a personal shopping assistant through a smart screen. It allowed them to design their own fur jackets and place orders, a level of personalisation previously unavailable to the Fendi client base. Behind the scenes, this innovative tool significantly reduced production costs for the collection. Fendi no longer needed to manufacture and ship jackets to flagship stores worldwide. As a spillover effect, this contributed to sustainability efforts by reducing the need for excess fur stock. Demand was placed firmly in the hands of consumers, allowing the brand to create a flexible supply chain system that met demand efficiently.

A casual meet-up in Milan between Threedium’s CEO with Sebastiano Mura, the Global Business Leader at Craft Worldwide and a key figure at IPG, set the wheels in motion for the Series A round. Having witnessed the potential of Threedium firsthand, Mura embarked on a mission to raise awareness within IPG's innovation community about the startup's tools. “I also have to say that Mike’s team is very fast and agile, always ready to approach clients and think about bespoke solutions; in our world, this is priceless,” he says, adding that for global giants like IPG, often entangled in bureaucratic intricacies, investment in nimble and responsive teams brings about a sense of balance.

Boundaries collapse

In commerce, improving customer experience stands as an omnipotent key to success. In recent years, consumer behaviour has witnessed a paradigm shift, with online shopping emerging as the norm. According to data aggregator Statista, global e-commerce sales have increased by some 800% since 2010 (US$5,7 trillion in 2022). Insights from the World Economic Forum also suggest that the COVID-19 pandemic has accelerated the shift to online shopping, with e-commerce sales surging by 44% in 2020. Charalambous observes that shoppers now exhibit heightened willingness to add high-value items to their digital carts. "You can convince them to buy even without setting foot in a store," he stresses. To unlock every iota of value, traditional brick-and-mortar companies, once heavily invested in their physical spaces, now strive for equilibrium, allocating resources equally to improving the customer experience in the digital domains. Yet, what has transpired is that treating the physical and the tangible as distinct and unconnected yields but a fraction of their potential.

It is a well-documented fact that shoppers are wary of purchasing furniture online since it is impossible to eyeball how a chaise longue would fit within one’s décor. AR and 3D configurators change the game: with just a phone, customers can visualise whether a piece and style of furniture matches their living room assortment. According to Charalambous, through their collaborations, a compelling statistic emerges in the form of an 18% reduction in product returns as AR and real-time 3D experiences offer a level of understanding that static images or videos cannot match. He even predicts that consumers will demand AR experiences as part of their shopping journey, and by becoming increasingly ubiquitous, they will evolve from novelty to necessity. It is why Threedium's long-term strategy revolves around AR becoming the norm in every omnichannel product-buying experience.

Delving deeper into industry-specific impacts, Charalambous underscores how the automotive industry now heavily relies on real-time configurators for vehicles, motorcycles, and bicycles. These tools have become indispensable to their commercial strategy, with companies risking client attrition by sticking to the old, static ways. The technological tide extends to previously untapped sectors, such food and beverage. While these experiences may not be as pivotal in driving sales, they constitute captivating entertainment points. Threedium's collaborations with spirits brands like Diageo, Guinness, Hibiki, and Yamazaki exemplify this trend. Interactive menus, where customers can visualise cocktails in 3D by scanning a QR code, are transforming the bar-going experience.

Luxury makeover

Luxury is a different beast. Brands like Hermes or Louis Vuitton weave tales of heritage, charisma and craftsmanship to separate themselves from their affordable counterparts – the price tag reflects the premium of storytelling and legacy. “In luxury, they always need to find ways to delight their customers by providing elements of hyper-personalisation and attention to detail. These are key revenue accelerants and growth drivers from a customer-facing front,” Mura explains. Luxury brands then must double down on experience-enhancing tools. It is one of the reasons that the industry is currently witnessing a race to secure coveted innovations – IPG’s investment in Threedium fits this mould. The numbers back this: in fashion and luxury, AR and real-time 3D customisations and configurators boost conversions by an impressive 20% to 25%.

According to Mura, Threedium's forte lies within creating digital experiences that allow consumers to feel the quality of luxury products in the digital realm, recreating the tactile sensations of a physical boutique in the digital space. This is achieved by providing personalisation options, such as customised initials or unique colour choices, or interactive kiosks and in-store experiences; Threedium heralds the fusion of the digital and physical worlds. This convergence offers a golden opportunity to cultivate customer loyalty as brands can greet shoppers with an intimate knowledge of their preferences and pre-built products. "These are all avenues we are actively trying to bring to life for brands,” Mura says.

The way forward

IPG's investment in Threedium raises intriguing questions about the potential future dynamics of their relationship. Does it signal Threedium’s eventual and inevitable exit? While a definitive answer remains elusive, Mura sheds light on the immediate implications of this investment. It catalyses IPG in shaping a more refined product roadmap for Threedium, indicating that it is committed to fostering Threedium's growth, leveraging the startup's innovative capabilities to enhance their own offerings. It hints at a future where Threedium and IPG continue to navigate the evolving landscape of technology and commerce in tandem, bridging the chasm between the physical and the digital with a keen eye on fulfilling the desires of the modern customer.