#227 – Summer ’25 Edition, Google AI Shopping, and… boobies?

by Paul Drecksler | May 26, 2025 | Recent Newsletters

Hi Shopifreaks

Have you been as excited for Shopify's Summer '25 Edition as I have? Or I a just an e-commerce nerd?

I've got another jam-packed edition for you this week (that will likely get clipped in Gmail), so let's dive right in!

In this week's edition I cover:

Amazon's $83M robbery
Shopify Summer '25 Edition
Google's new agentic shopping
Nike returns to Amazon
50% tariffs on the EU (or not)
commercetools is agent-ready
Walmart allows Amazon MCF
Amazon limits seller stockpiling
FedEx isn't worried about Amazon
The One Big Beautiful Bill Act
Puerto Rico's new Mercadito
Google smart glasses
Duolingo's cryptic video message

All this and more in this week's 227th Edition of Shopifreaks. Thanks for subscribing and sharing.

PS: Does this newsletter bring value to your business? If so, please write me a Google review!

Stat of the Week

An Armenian crime ring stole $83M worth of Amazon cargo since 2021. The DOJ accused the Artuni Enterprise of cargo theft by enrolling its associates as Amazon carriers who would get contracts for trucking routes, and then steal all or part of the shipment. The organization also allegedly ran a “credit card bust-out” scheme, in which they would charge various credit cards to a sham business and then drain the checking account before the credit card companies could collect the soon-to-be disputed funds.

1. Shopify releases Summer '25 Edition: Horizon

Shopify released its full Summer '25 Edition featuring 150+ updates designed to unlock creativity and enable merchants to spend less time dealing with technical challenges and more time building the brand they want — according to Shopify.

If you're unfamiliar with Editions, twice a year, Shopify releases a mega showcase of its latest features called Shopify Editions. I've covered all of their Editions including Winter '25, Summer '24, Winter '24, Summer '23, Winter '23, and Summer '22 (the first one).

Here's what's new with Summer '25 Edition. Some of these updates you've seen me talk about in recent editions and others were announced for the first time:

Horizon – A new first-party theme featuring 10 design presets and built-in AI assistance. Horizon introduces “Theme Blocks,” which allow merchants to group, reorder, and position design elements, without custom code.
AI Theme Block Generation – Merchants can now create entirely new storefront blocks with text prompts like “a banner with text and typing animation” — and AI generates the necessary code.
AI Store Builder – Catching Shopify up with Wix, Squarespace, WordPress, and other website builders that offer AI design, Shopify now offers the ability to generate store layout options, complete with images and text, based on a short description.
Shop App Home Feed – The app now offers smarter, personalized recommendations in the home feed that adapt based on real-time shopping activity, as well as curated collections where buyers can organize and save items into themed sets and share them with friends or co-shop with others.
Sidekick Real-Time Response Correction – Shopify's AI chatbot can now adjust its answers on the fly based on context and feedback for more relevant support. Plus, Sidekick now speaks 20 languages and can generate images.
Knowledge Base App – A new tool that creates AI-optimized, automatically generated store facts and FAQs so that merchants can better control how their brand appears in AI shopping conversations.
Shopify Store Credit Refunds – Third party apps can now issue refunds directly to a customer's store credit, even when that wasn't the original payment method, unlocking the ability for merchant's to automate their “keep the cash in store” workflows.
Improved Theme Customizer – Now offering hover-to-preview in block picker, categories for blocks and sections, one-click text editing, custom names for blocks and sections, and the ability to copy and paste blocks and sections. We're so close to Global Sections / Blocks that update across templates from the Theme Customizer! Please get us there Shopify!
Redesigned POS – Now offering the ability to brand customer display screens and process mixed-fulfillment orders in a single transactions, so customers can take items home while shipping others.
Checkout Updates – Merchants can now charge customers a single flat rate when fulfilling from multiple locations to reduce unexpected shipping costs, customers can buy physical products in Roblox through a new integration, and Shop Pay Installments came to Canada.
Apple Pay Upgrade – Merchants can now offer Apple Pay as a payment method through the traditional payment area (where the credit card field appears), as opposed to as an Express Checkout option.
Shopify Payments in 16 More Countries – The payment type is now available in Lithuania, Poland, Norway, Latvia, Hungary, Estonia, Malta, Croatia, Greece, Slovenia, Cyprus, Bulgaria, Liechtenstein, Luxembourg, Gibraltar, and Mexico.
Improved Global Commerce – Shopify now lets Plus merchants sell from multiple business entities, receive payouts in multiple currencies, and collect duties, taxes, and tariffs at checkout.
B2B Markets – Merchants can now create multiple B2B markets, each with their own unique catalogs, currency, and storefront theme customizations.
Tap to Pay on Mobile App – Previously only available from the POS, merchants can now accept contactless payments directly on their phone through the Shopify mobile app.
Discount Codes in Cart – Merchants using the Horizon theme and the Ajax Cart API can now enable customers to apply discounts directly in the cart, as opposed to waiting until the checkout screen.

You can check out the rest of the updates in the full Summer '25 Edition.

Merchants: Which new features are you most excited about? What features are you still waiting for?

App Developers: Which updates have the most impact on your business?

Hit reply and let me know.

2. Google introduces shopping to AI Mode

Google is rolling out new AI-powered shopping tools, including personalized product discovery via AI Mode, an agentic checkout that completes purchases using Google Pay, and a virtual dressing room that lets users try on clothes using their own photos.

Here's how shopping in AI Mode with agentic checkout works:

You tell AI Mode you're looking for a cute travel bag.
It shows you a browsable panel of images and product listings personalized to your tastes.
From there you can narrow your options down to bags suitable for a trip to Portland, Oregon in May, and AI Mode will start a “query fan-out,” which means it runs several simultaneous searches to determine what makes a bag good for rainy weather and long journeys.
It uses those criteria to suggest waterproof options with easy access to pockets.
A new right hand panel dynamically updates with relevant products and images as you refine your search.
Once you've made up your mind, tap “track price” on any product listing and choose your size, color, or any other options, and the amount you want to spend.
Google will send you price drop notifications, and when you're ready to buy, you can click “buy for me” and Google will complete the purchase for you on the merchant's site with Google Pay.

The updates, which are powered by Gemini and Google's Shopping Graph, are launching in the US this summer.

Search Engine Land points out that Google's AI mode is not passing referral data, meaning it's impossible for website owners to know how many clicks they got from it.

Lily Ray, VP of SEO Strategy and Research at Amsive, said:

“Google does NOT want us having access to traffic data for AI Mode, or AI Overviews for that matter, because it will reveal just how little traffic both are actually driving to external websites.”

Thomas Baekdal, a media analyst and founder at Baekdal Media, commented on the risk of AI shopping to merchants:

“So, now you don't get the mobile view or the desktop view. You get no additional sales, and you have to ship each item individually. This is just so mind-bogglingly idiotic that I'm 100% sure that nobody at Google has ever actually worked with real webshops because, if they did, they would never have made this feature. It's going to destroy the profitability of so many webshops. And no, scale doesn't fix it when you end up with a much higher per-item cost.”

What are your thoughts? Will AI-powered shopping actually catch on with consumers? And for merchants, will it be a net gain or a detriment to their business? Hit reply and let me know.

Meanwhile, Google is taking some heat for its virtual try-on tool adding boobs to users!

Try It On was caught adding boobs to both women and men, including minors, trying on women's clothing. Google says that Try It On “understands the human body and nuances of clothing,” but the tool appears to be morphing bodies to match idealized model standards using photos from the merchant websites and using gender stereotypes, rather than realistically fitting the garments to users’ actual photos.

The Atlantic tested the tool with Vice President J.D. Vance, OpenAI CEO Sam Altman, former President Abraham Lincoln, and other famous male figures — and Google gave them boobs! The tool also repeatedly enhanced the breasts or added breasts that were not visible to images of women.

Google said that the company has “strong protections, including blocking sensitive apparel categories and preventing the upload of images of clearly identifiable minors,” and that it will “continue to improve the experience.”

3. Nike returns to Amazon after a six-year hiatus

Nike will begin selling on Amazon again, six years after it said goodbye to the platform, in a bid to revive slumping sales. Moving forward, Amazon will begin sourcing Nike products directly from the brand, and, as a result, is banning select third-party sellers from offering overlapping items, beginning on July 19th.

An Amazon spokesperson said:

“While independent sellers have listed some Nike inventory in our store for many years, Amazon will soon begin sourcing a much wider range of Nike products directly to expand our selection for U.S. customers. We value independent sellers, and we’re providing an extended period of time for the small number of sellers affected to sell through their inventory of overlapping items.”

Nike stopped selling on Amazon in 2019, two years after it began, following complaints that Amazon wasn’t doing enough to combat counterfeits and unauthorized sellers, which were part of Nike's conditions for selling on the marketplace.

The company then embarked on a failed experiment of focusing on selling D2C through its own stores and website, pulling back from major brick-and-mortar retail partners like Foot Locker in 2022.

At first, D2C sales spiked during the pandemic, however sales took a dive in the years that followed, leading to Nike replacing its CEO in October. The new CEO, Elliot Hill, has moved quickly to reset Nike, meeting personally with retailers the company had shunned under its previous leadership to bring Nike products to their stores.

So chances are you'll be seeing more Nike products in retailers near you — however expect a higher price tag. The company announced that it will raise prices on its footwear, apparel, and equipment this week as it braces for tariffs.

4. Trump threatens 50% tariffs on EU goods, but then retreats

On Friday, President Trump expressed frustration with the pace of talks with EU leaders and threatened to raise the tariff rate in the region to an even higher level of 50% as soon as June 1st.

Trump posted on Truth Social:

“Their powerful Trade Barriers, Vat Taxes, ridiculous Corporate Penalties, Non-Monetary Trade Barriers, Monetary Manipulations, unfair and unjustified lawsuits against Americans Companies, and more, have led to a Trade Deficit with the U.S. of more than $250,000,000 a year, a number which is totally unacceptable. Our discussions with them are going nowhere! Threfore, I am recommending a straight 50% Tariff on the European Union, starting on June 1, 2025.”

Last month, Trump announced a 20% tariff on most EU goods, but later cut it to 10% to allow time for negotiations, which apparently aren't happening fast enough for him.

However on Sunday, he announced that he was pushing his deadline back to July 9th after a “very nice” call with Ursula von der Leyen, the European Commission chief, who echoed Trump's assessment of the call and said that the block was “ready to advance talks swiftly and decisively.”

Prior to threatening the 50% rate, Trump had set a deadline of July 8th for both sides to talk, so in the end, he negotiated the EU an extra day.

In other tariff news this week… President Trump threatened a 25% tariff on all foreign manufactured iPhones and Samsung phones, to encourage the companies to move their manufacturing to the US. Trump said that to be fair, the tariff would apply to all phone manufacturers and “that'll start on, I guess, the end of June.”

Following the announcement, California Attorney General Rob Bonta said he's prepared to sue if appropriate to defend the state's companies like Apple.

Bonta said:

“We definitely will assess our potential role. We will be monitoring what he does, if he does anything, and we'll make sure that if the law is broken and we have standing to sue, we'll take appropriate action.”

5. commercetools launches agent-ready tools for enterprise commerce

At its 2025 Elevate Global Commerce Summit in Miami Beach, commercetools introduced two new innovations designed to integrate AI into enterprise commerce systems without requiring replatforming.

#1) Commerce MCP (Model Context Protocol) transforms backend services like product catalogs, carts, pricing, promotions, and orders into in an agentic AI accessible format. It currently supports integration with major agent development frameworks including OpenAI's Agent SDK, Vercel's AI SDK, Langchain, and CrewAI.

A few use cases of Commerce MCP include:

Personalized product discovery and recommendations
Cart creation and checkout orchestration
Customer service flows powered by real-time data
Internal agents for developer productivity and operational workflows
Catalog data enrichment

#2) AI Hub offers plug-and-play integrations with leading AI platforms, to allow fast deployment of agent-driven experiences without the need to re-architect. For example, brands can quickly plugin their buy button into conversational shopping agents, enabling checkout to happen earlier in the journey.

These tools are designed to address a core issue in AI adoption: legacy systems weren’t built for AI agents. commercetools emphasized that these solutions reduce development time and eliminate the need for custom connectors.

Both products are currently in early access, with full availability expected later in 2025.

6. Walmart officially allows Amazon fulfillment on marketplace orders

Walmart updated its policies and now officially allows the use of Amazon Multi-Channel Fulfillment — a service that allows sellers to use Amazon’s fulfillment network from other sales channels — to fulfill orders on Walmart Marketplace.

In the past, many sellers got suspended for using Amazon to fulfill their Walmart orders, even when they used blank boxes and approved carriers like USPS, but now Walmart has provided clear guidelines for sellers, which include:

Items must be shipped in a neutral box (ie: no Amazon logos).
Sellers must block Amazon Logistics as a carrier to ensure orders aren't delivered using Amazon-branded vehicles.
Sellers can only use non-Amazon carriers like USPS, UPS, and FedEx.

Walmart still prohibits:

Retail arbitrage, which means no selling products on Walmart, and then turning around and buying those products directly from Amazon to ship to your customer.
Including any promotional materials, invoices, or packing slips from Amazon.
Marking items as “shipped” before receiving confirmation that they've left Amazon's warehouse.

Daniel Sodkiewicz, CEO of GeekSeller, wrote:

“This policy update is a major win for multi-channel sellers. It reduces guesswork, avoids suspension risks, and opens up new strategies to scale your business using both Amazon and Walmart’s infrastructure.”

Sodkiewicz notes that Amazon is also becoming more flexible in allowing sellers to use Walmart Fulfillment Services (WFS) for fulfilling Amazon orders.

“It’s great to see these two giants becoming less restrictive. This shift not only makes life easier for sellers, it also strengthens both platforms by making them more seller-friendly—and less likely to lose ground to new competitors.”

7. Amazon limits sellers from stockpiling too much inventory

Amazon is imposing strict new limits on warehouse space, mirroring its pandemic-era inventory caps, as US merchants rush to stockpile inventory ahead of looming China tariffs.

The Information reports that toy merchant Mason Beck saw his fulfillment center capacity slashed by 75%, blocking him from restocking and costing his company over $100,000 in sales and $30,000 in profit. Another seller, Eric Moore, who sells up to $3M a year on Amazon, said that the company cut his warehouse capacity by two-thirds in recent weeks.

In several instances, merchants have tried to send inventory to Amazon fulfillment centers and received an unusual error message that read, “COVID19_LIMIT_EXCEEDED” — the same message sellers received in 2020 when Amazon last imposed strict inventory restrictions.

An Amazon spokesperson said that the company adjusts capacity limits in order to “maintain an efficient fulfillment network to ensure we can continue providing customers with fast delivery of a broad selection of products.”

“Rules for thee, but not for me.”

Although Amazon is cracking down on sellers for stockpiling inventory, the company is doing it themselves. In early April, CEO Andy Jassy credited Amazon's own stockpiling as the reason they haven’t had to raise prices.

8. FedEx says Amazon isn't a “pure competitor”

FedEx doesn't see Amazon as a “pure competitor,” according to its EVP and chief customer officer, Brie Carere, who spoke at a Bank of America conference earlier this month with her head completely buried in the sand.

Carere said at the conference that Amazon's shipping services still have catching up to do in terms of pickup offerings, doesn't have the sortation operations needed to compete with FedEx's Express portfolio, and falls short in terms of large-package and rural deliveries.

The conversation comes after reports that Amazon rekindled its relationship with FedEx to handle some of its largest package deliveries, following UPS' decision in January to reduce the amount of Amazon volume it delivers by more than 50%.

Is this the same Amazon that didn't have its own delivery fleet a decade ago, but now delivers two-thirds of its own orders?

And the same Amazon that recently announced a $4B initiative to expand their delivery network to rural America?

Not a “pure competitor”? In my opinion, Amazon is THE competitor!

Either FedEx is blatantly lying to investors about Amazon's threat to their business, or their leadership is in denial and needs to go.

Or am I the crazy one?

I'd love to hear your thoughts. Hit reply to this e-mail or join the conversation on LinkedIn.

9. Other e-commerce news of interest

The US House of Representatives passed the “One Big Beautiful Bill Act,” which includes a key provision to roll back the 1099-K reporting threshold to its original levels: over $20,000 in gross payments and more than 200 transactions per year. If signed into law, this would override the IRS’s phased reduction plan introduced under the American Rescue Plan, which was set to drop the threshold to $600 by 2026. The change would apply at the federal level beginning with the 2025 tax year but would not affect lower thresholds in certain states. Other parts of the 1,000+ page bill include tax cuts, Medicaid and food aid work requirements, energy development, student loan overhauls, border security funding, and the creation of a $1,000 “Trump” savings account for newborns.

Microsoft Bing’s IndexNow, a protocol that instantly notifies search engines when website content changes, now supports product schema and is live for Shopify stores, with Amazon expected to join in June. The integration allows real-time indexing of product updates like price, availability, and images without relying on separate merchant feeds. By combining IndexNow signals with structured product data like product title, price, brand, GTIN, etc., e-commerce sites can ensure faster and more accurate visibility within Microsoft search, shopping results, and ads. Google has previously tested the IndexNow protocol, but has not adopted it into its indexing infrastructure.

Etsy now lets sellers assign specific processing times to individual product variations using new “processing profiles,” allowing for more accurate estimated delivery dates starting May 27. Whereas a “shipping profile” lets sellers assign shipping details to multiple listings, a processing profile now lets them set a processing time for multiple listings or multiple variations. Etsy is also now offering sellers post-purchase summaries that show a breakdown of what shipping costs, marketing expenses, transaction fees, payment processing fees, and taxes were deducted from the order to give them a better understanding of how much they net on each sale.

Puerto Rico introduced Mercadito, credited as Latin America's first government sponsored e-commerce procurement platform that centralizes over 25,000 preapproved products and services, including office equipment, IT hardware, and medical supplies, into a single searchable catalog. The system includes real-time price comparisons, vendor ratings, and an integrated checkout process with electronic approvals. The platform, which was built in collaboration with Glass, a Silicon Valley government technology company, is designed to streamline the ability for government agencies to buy goods and services via listings that are offered under pre-negotiated terms and pricing.

Meta launched an “Early Release” program that will provide advertisers with access to test new generative AI Advantage+ creative features across Facebook, Instagram, and Threads before they become available to the masses. Advertisers who participate in the program will have the ability to preview and customize their ad variations in Ads Manager before deciding to fully opt in to the unreleased feature, which could be rolled back based on advertiser evaluations and eventually removed from all active ads.

The EU is proposing a €2 handling fee on low-value direct-from-China parcels delivered directly to consumers from platforms like Shein and Temu to help offset the rising cost of compliance checks on the 4.6B packages it now receives annually, of which 91% come from China. A lower €0.50 fee would apply to goods handled by EU-based warehouses. The fee, which would be paid by online retailers, requires approval from EU governments and Parliament, and is part of the region's broader efforts to level the playing field with European retailers.

The UK’s Financial Conduct Authority proposed new rules for Buy Now, Pay Later providers that will take effect in 2026, requiring affordability checks, quicker refunds, and granting consumers the right to escalate complaints to the Financial Ombudsman. The measures are designed to curb rising consumer debt and bring greater oversight and accountability to a sector that has operated largely unregulated. According to research from the personal finance site Finder, 1 in 8 Brits used BNPL services for the first time in 2025, or an estimated 6.8M people, while 2 in 5 consumers admitted to using BNPL services at some point in the past.

Instacart is planning to follow its current business strategy, according to its CFO Emily Reuter, despite the recent exit of its CEO Fidji Simo, who is leaving after four years at the company to become CEO of OpenAI Applications. Reuter says that the company's strategy will remain unchanged, continuing to focus on small-basket orders, restaurant partnerships, and operational refinements to grow order frequency and user retention.

Lowe's is accelerating the rollout of its third-party online marketplace through a collaboration with Mirakl, a France-based software company that provides marketplace infrastructure to retailers. The company first launched its marketplace in December 2024, and through its new partnership with Mirakl, hopes to scale it faster by adding new categories and making it easier for sellers to list products and manage their catalogs. Buyers through the marketplace are eligible to receive MyLowe's Rewards points, as well as home delivery and in-store returns on all purchases.

Fifth Third, Dart Bank, and core banking tech giants FIS and Fiserv are moving quickly to integrate stablecoin payments as Congress prepares to pass new legislation regulating the crypto tokens. The bill, known as the GENIUS Act, could clear the way for banks to enable cross-border payments, merchant settlements, and consumer purchases using stablecoins as early as this summer. President Donald Trump’s top crypto and AI advisor David Sacks said that providing legal clarity and regulation for stablecoins “could create trillions of dollars of demadn for our Treasuries practically overnight, very quickly.”

TikTok added an AI Assistant chatbot tool into its Seller Center product management platform, which is an area of TikTok Shop dedicated to providing information for brands looking to sell products in the app. The chatbot provides advice on optimizing listings and maximizing visibility, as well as access to key insights and performance data and personalized recommendations on marketing approaches.

Amazon removed sellers’ ability to bypass message opt-outs by using “[Important]” in subject lines, requiring them to instead use predefined templates for critical order communications. Amazon says the change respects buyer preferences and ensures essential messages still get delivered, while some sellers argue the templates are inflexible and poorly worded for scenarios like custom orders, leading to frustration and potential fulfillment issues. Some sellers noted benefits like built-in translations and order ID inclusion, but others see the update as a step backward for customer service.

Google unveiled its long-awaited smart glasses, which are based on the company's Android XR technology developed with Samsung and include components of augmented reality and AI technology, at the Google I/O presentation. The company also announced partnerships with eyeglass brands Warby Parker and Gentle Monster. In a demonstration on stage, Google presenters showed how its Gemini AI assistant worked with the glasses, so the wearer could ask questions and see answers overlaid on the lens using AR technology. It's not clear when the eyeglasses will hit the market.

Amazon is piloting a new feature called “Hear the Highlights” that lets shoppers listen to AI-generated audio clips in which two virtual hosts discuss a product’s features and reviews. I literally can't think of any feature that I'd enjoy less. Hear the Highlights is available for select items in the mobile app like the Ninja Blender and SHOKZ OpenRun Pro and pulls insights from product listings, user reviews, and web sources. It is currently limited to some US users, but Amazon plans to expand access in the coming months.

In corporate shakeups this week… Marcos Galperin, founder of MercadoLibre, announced he is stepping down as CEO at the end of the year, to be replaced by the company's current commerce head, Ariel Szarfsztejn. Guitar Center appointed Erick Smith, who brings over 15 years of experience in omnichannel retail, as its new Director of E-commerce. TikTok hired Jori Arancio, a former Warner Bros. Discovery communications executive, to lead Global Consumer & B2B Communications. Digg is bringing on Christian Selig, the developer behind the now-defunct Apollo app for Reddit, as an advisor. Also, eBay is on the hunt for new leadership for its Canadian marketplace, with an eye toward strengthening North American cross border trade.

TikTok told US e-commerce staff to work from home last Wednesday and await e-mails regarding “difficult decisions,” suggesting that the company is preparing to cut jobs in the ivision. Mu Qing, who took over TikTok Shop in the US last month, said in an internal memo that the company is currently considering ways to “create a more efficient operating model” and that workers should expect “operational and personnel changes to the e-commerce US operation center and global key accounts teams beginning early on Wednesday.”

eBay is shutting down the Syracuse TCGPlayer authentication center, laying off over 200 unionized workers to move authentication operations to Kentucky. The Communications Workers of America union condemned what they say is an illegal action taken by eBay to avoid bargaining with the union after it filed another unfair labor practice charge with the National Labor Relations Board. eBay acquired TCGPlayer in October 2022 for $295M. The union also called out the fact that eBay CEO Jamie Iannone's $21M compensation last year is 536x the average salary of the workers at the facility whose jobs are being terminated.

TikTok integrated SoundCloud into its Add to Music App tool, letting users save tracks directly to their SoundCloud Liked playlist. The feature launched in 2024 and has since surpassed one billion track saves across platforms. TikTok is also enabling ticket sales of the upcoming John Wick spin-off Ballerina through a partnership with Lionsgate, which is set for release on June 6th. The collaboration marks the first time a physical movie ticket can be purchased on TikTok Shop in the US.

Amazon shareholders rejected a proposal that would require the company's CEO and board chair roles to permanently remain separate, with 82% voting against the proposal. The company split the roles when CEO Andy Jassy took the position in 2021, with Jeff Bezos retaining the position of executive chairman, and the proposal sought to codify the structure within Amazon, under the reasoning that the split structure allows the board to focus on corporate governance and oversight, while the CEO focuses on the company's business. Amazon urged shareholders to vote against the proposal, arguing that the current policy enables the board to determine the right leadership for the company “in light of our specific circumstances at any given time.”

Builder.ai, a Microsoft-backed platform once valued at over $1.3B that let users build software without needing to code, is filing for bankruptcy and appointing an administrator to manage the companies affairs. The London-based company was previously known as Engineer.ai, and attracted criticism after the Wall Street Journal revealed in 2019 that it used human engineers rather than AI for most of its coding work. In February 2025, Manpreet Ratia was appointed as Builder.ai's new CEO and tasked with informing employees that the company was filing for bankruptcy after its more than $450M in funding abruptly ran out.

Klarna CEO Sebastian Siemiatkowski leaned into his company's reputation of replacing humans with AI by using an AI doppelganger of himself to report quarterly earnings in a YouTube video. In the video, which lasted just under a minute and a half, the avatar delivered earnings highlights, sporting a brown jacket like the one in Siemiatkowski's corporate headshots. It honestly looked pretty good! Maybe the company can use AI executives in more ways to reduce executive compensation and offset its steep financial losses.

Many Amazon customers are receiving refunds on products they ordered years ago, with one customer, Steven Pope, reporting that he received an $1,800 refund on a smart tv he purchased over seven years ago in 2018! Bloomberg reports that the precise scope of the refunds is unclear, but executives hinted that it could be in the hundreds of millions of dollars. Amazon CFO Brian Olsavsky said on a recent conference call that the company took a one-time charge of approximately $1.1B in the first quarter related in part to “some historical customer returns” that were unresolved. Amazon said that it identified a “very small subset of returns” that were unresolved because it could not verify that the correct item had been sent back, but that the company decided to “err on the side of customer” and complete refunds for the items. Better late than never?

🏆 This week's most ridiculous story… Duolingo went dark last weekend on social media and removed all of its posts from TikTok and Instagram, where it has 6.7M and 4.1M followers respectively, following heavy backlash after the company unveiled its new AI-first policy. Then after days of silence, the company posted a bizarre Anonymous-inspired video message on Tuesday, where its social media team (or person?) separated themselves from company leadership and said that “Everything came crashing down with one single post about AI” and that “No owl should be above the law!” — while claiming that it was time to teach Duolingo a lesson. Reception to the video was not positive in the comments, with a top comment saying, “chatgpt generate me a quirky gen z script to save my dying company.”

10. Seed rounds, IPOs, & acquisitions

OpenAI acquired io, a hardware startup co-founded by former Apple designer Jony Ive, in an all-stock deal worth $6.5B, marking its biggest acquisition to date and signaling the company's push beyond software into consumer hardware. The deal brings in a team of 50+ hardware veterans, including former Apple engineers, and forms a dedicated hardware division at OpenAI. While details remain secret, reports suggest the team is developing a new class of AI-native devices that could go beyond screens, with a launch expected in 2026.

Stord, a cloud supply chain company that provides end-to-end logistics services like warehousing, fulfillment, and freight through a unified platform, is acquiring Ware2Go, a UPS-backed logistics platform that helps SMBs offer fulfillment across the US by matching them with a network of on-demand warehouses, for an undisclosed amount, following the company's $200M Series E round that I reported on last week. The company's founder, Sean Henry, said the acquisition builds on its push to “level the playing field” against companies like Amazon Prime by offering smaller businesses the same backend infrastructure. The acquisition adds 2.5M sq.ft. to Stord's existing network of 13 facilities in the US, Canada, the UK, and the Netherlands and more than 70 partner sites worldwide.

Wix acquired Hour One, a Tel Aviv startup that enables the creation of studio-quality video content at scale by turning text prompts into videos with computer-generated characters based on real people, for an undisclosed amount, aiming to bolster the company's content offerings with generative AI-based video production tools. Following the acquisition, Hour One founders and team will join WIx at their Tel Aviv headquarters.

Worldeye Technologies, a US-based company that develops AI software tools to assist e-commerce sellers with marketplace optimization and analytics, acquired BidX, a provider of AI-powered PPC and DSP ad automation for marketplaces like Amazon and Walmart. The move adds advanced ad optimization tech to Worldeye’s growing e-commerce suite, which already includes Viral Launch and DataHawk, and further the company's push to offer a full-stack ecosystem for marketplace brands.

Salesforce signed a definitive agreement to acquire Convergence.ai, a platform that enables AI agents to navigate dynamic interfaces and adapt in real time so they can manage things like web-based workflows and multi-step processes, for an undisclosed amount. Salesforce says that it expects Convergence's team and technology to play a “central role” in advancing its AI agent platform, Agentforce, as well as contribute to deep research, task automation, and industry-specific solutions that will advance the company's broader AI roadmap.

MNTN, a Ryan Reynolds-backed ad tech company specializing in connected TV advertising, held its IPO last week on the NYSE, raising over $187M. The company set its IPO price at $16 and ended its first day of trading up 60% with shares trading at $26/each, giving the company a market value of nearly $2B.

Korl, a customer success software startup that uses AI to help companies better communicate the value of their products and services to customers, raised $5M in a seed funding round led by MaC Venture Capital and Underscore VC. The company has built a “presentation agent” that connects to data sources like Salesforce, Jira, Google Docs, and Figma and creates customized presentations for customers at critical milestones, such as executive business reviews and renewal conversations, that addresses each customer's top concerns.

Pagaya, a fintech that uses AI to underwrite consumer credit for banks and lenders, is issuing $300M in bonds that will be used to fund BNPL loans offered by Klarna. In the last 12 months, Pagaya has issued about $5B of bonds backed by bundles of unsecured personal and auto loans that the company once focused on.

Evri, a UK-based parcel delivery company formerly known as Hermes UK that offers courier and logistics services to businesses and consumers, acquired Coll-8, an Irish customs clearance and logistics specialist, for an undisclosed amount. The acquisition aims to strengthen Evri's end-to-end capabilities in Ireland and the EU by integrating Coll-8's platform, which automates and streamlines cross-border trade. Last week I reported that DHL acquired a significant minority stake in Evri, with plans to merge its e-commerce division with the company.

RevenueCat, a platform used by over 70,000 mobile apps to manage subscriptions, raised $50M in a Series C round led by Bain Capital, at a $500M valuation. The company will use the funds to build out services like web payments (post-Epic ruling), customer acquisition, and lending. It recently launched a paywall editor, virtual currency tool, and now supports over 2,000 billing integrations through its acquired app, Dipsea.

Zoca, an AI-powered growth platform for local service businesses, raised $6M in a round led by Accel to expand its agent-led marketing infrastructure. The platform automates discovery, booking, and rebooking for businesses like salons and wellness centers, and has already helped over 1,000 merchants generate $10M+ in revenue and 120,000+ bookings.

FanBasis, an all-in-one platform for digital entrepreneurs that unifies payments, fulfillment, CRM, community, and content hosting, raised $20M in a Series A round led by Left Lane Capital with participation from Ryan Serhant, Gerard Piqué, and members of The Sidemen. The company will use the funds to accelerate product development, team growth, and global expansion.

Forethought, an AI company specializing in agentic AI solutions for customer support that uses LLMs to automate tasks like ticket triage, response generation, and customer self-service across platforms, raised $25M in a Series D round led by Blue Cloud Ventures, bringing its total amount raised to $115M. The funds will help accelerate adoption of its multi-agent, omnichannel AI platform and support the company's aim to lead the shift from scripted bots to autonomous AI agents that resolve issues across channels.

Publicis Groupe, a French advertising, publication relations, and data brokerage firm, acquired Captiv8, an independent influencer marketing platform with over 15M creators across the globe, for an undisclosed amount. The company plans to combine Captiv8 with Epsilon and Influential to create an influencer operation “of unmatched scale and reach” that will sit within Publicis Groupe's Connected Media division.

OnBuy, a UK online marketplace, acquired Comet, a British electronics retailer that ceased operations in 2012 after going into administration, from Misco Technologies, with plans to inject £10M into the once household brand name and relaunch it in Q4 2025. The acquisition is expected to position OnBuy, which is one of Europe's fastest growing tech retailers, as a serious challenger to Amazon and Currys.

Circle, a Kuwait-based quick commerce startup that offers grocery delivery in under 20 minutes, raised $6M in a Series A round to support regional expansion. The company has seen 7x revenue growth since launching dark stores in 2023 and plans to enter new markets by 2026 using its real-time inventory and precision logistics model.

Airwallex, an Australian fintech that helps businesses manage cross-border payments, treasury, and financial operations, raised $300M in a Series F round led by Square Peg, DST Global, Salesforce Ventures, and others, at a $6.2B valuation, up from $5.6B in 2022. The company's chief revenue officer, Wu Kai, defended the valuation as “an intentional choice,” now that backers are emphasizing product defensibility, durable business models, and scalability since the fintech industry's peak in 2021, but noted that Airwallex expects its average growth rate to remain above 50% for the next five years.

Hinge Health, a San Francisco-based digital health company that provides virtual physical therapy and musculoskeletal care through wearable sensors and apps, raised $437M in its IPO, with shares ranging from $28 to $32 at a $2.47B valuation. The company, which raised $400M at a $6.2B valuation in 2021, had a net income of $17M on revenue of $124M during the first three months of 2025, compared with a net loss of $26M from revenue of $83M during the same period a year earlier.

Sylndr, an Egyptian online platform for buying and selling used cars that offers financing and vehicle inspection services to streamline the process, raised $15.7M in a round led by Development Partners International's Nclude Fund, along with $10M in debt financing from local banks, bringing its total amount raised to over $30M. The company's revenue is now evenly split between D2C sales and B2B transactions with dealers, and it expects that newer financing and servicing verticals will contribute up to 60% of gross profit within two years.

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Paul E. Drecksler
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