Pie secures $19.5 million to maintain the visibility of small businesses in AI search results.

      For three decades, small businesses have competed to improve their ranking on Google. Now, their customers are turning to ChatGPT for recommendations instead. A startup based in New York is determined to ensure that local salons remain visible.

      The startup, named Pie, has recently emerged from stealth mode armed with significant funding. It secured $19.5 million in a Series A round led by Lightspeed Venture Partners, bringing its total funding to $23.7 million. Other investors in this round include Capital One Ventures, Max Levchin’s SciFi VC, F-Prime, and more.

      Pie markets growth tools to what it describes as Main Street businesses, such as nail salons, auto repair shops, and local gyms. Its premise is straightforward: customer discovery is rapidly shifting from Google's traditional blue links to AI-driven answers. Many small businesses are unsure how to adapt to this change.

      Optimizing for chatbots rather than just Google is a key focus. The platform consists of three components. AI Search aims to highlight a business when users request recommendations from ChatGPT, Claude, or Perplexity, while Growth targets high-intent channels like Google Maps, Yelp, and Nextdoor.

      Launched this week, Front Desk serves as an AI receptionist, available around the clock to answer calls, manage bookings, and respond to inquiries. The central theme is demand generation rather than administrative tasks. While many tools assist businesses in managing existing customers, Pie claims it is designed to attract new ones, a crucial distinction as the traditional search funnel deteriorates. Google’s transition to AI-generated answers has decreased traffic to smaller websites.

      Consumers are moving away from the ten blue links, with some opting to allow chatbots to make selections and purchases directly.

      Price plays a pivotal role in this model. For a long time, enterprise marketing software has been prohibitively expensive for small shops. The typical alternative is hiring an agency, which can cost between $2,500 and $5,000 per month under lengthy contracts with limited results. Pie significantly undercuts this pricing. One salon owner in Los Angeles reported to Inc that she pays $359 monthly.

      Subsequently, her sales increased by $10,000 to $12,000 each month, enabling her to hire additional staff and add nail tables.

      “Small business owners have been trapped by costly and opaque agency models for years,” stated co-founder and CEO Syed Ali. He noted that every owner expressed the same need: they require more customers but cannot afford an agency.

      Ali and co-founder Akhil Mantripragada are former employees of Square and Toast. They recognized the gap while developing an AI product for restaurants.

      Pie claims it has already connected with thousands of businesses, building its client base quietly through referrals and partnerships. It has generated over 100,000 phone calls for its clients, who typically experience a 15 to 20 percent increase in year-on-year sales, according to the company. Additionally, Pie integrates with vertical software platforms, like the auto-repair system Tekmetric, allowing access to merchants via tools they already use.

      A competitive new market is emerging. Numerous companies are attempting to capitalize on this shift, with a small industry now focused on getting brands mentioned by AI, a practice sometimes referred to as generative engine optimization, while competitors like Peec AI are quickly securing funding.

      The lingering question is whether the ability to “show up in ChatGPT” will become a sustainable business model or merely a feature that larger platforms incorporate. For now, Pie is banking on the need for assistance among Main Street businesses and believes it can provide that support at a lower cost than traditional agencies ever could.