In 2020, Kathryn Wu launched a side hustle, OhTea, a milk tea company, while working as a product engineer at Pinterest. The journey quickly became challenging as Wu struggled to connect with local grocery stores and gift shops, facing difficulties in locating potential retailers and identifying the right points of contact. The fragmented market and complex navigation ultimately contributed to the business’s failure.
“I failed to reach product market fit,” Wu shared with TechCrunch. “It’s just very hard to find that retail information. I needed to pull from several tools, pull up a big spreadsheet and I thought maybe I should just solve my own pain point.”
This experience led Wu to co-found Openmart three years later, alongside Richard He. Openmart positions itself as an AI-driven alternative to Zoominfo, designed to simplify and streamline the process of locating and contacting local businesses. The platform uses AI to scrape data from public business filings, maps, customer reviews, and other sources, aggregating a comprehensive database of local businesses organized by type. Users can input prompts to generate a list of potential sales leads, complete with business owners’ names and contact information.
Wu and He, who reconnected through an Asian entrepreneurship community after their time as interns at Pinterest, bonded over their shared experience and their dogs—Wu has a golden retriever, and He has a lab. When He saw Wu’s interest in starting a company, he quickly joined the venture.
Initially inspired by Wu’s difficulties with OhTea, Openmart’s mission evolved during the research phase. The team discovered that large enterprises also struggled to navigate local business sales, leading them to focus on building a product tailored to these larger entities while still serving local businesses.
“Our core focus is still local business,” He emphasized, “We know it is a huge pain point. We are confident this AI agent can generate outbound sales leads as we grow into more sectors, not just physical businesses. AI in the first wave is not replacing lawyers or doctors; it’s more replacing lower intelligence, lower logical orders of reasoning tasks.”
Founded late last year, Openmart participated in Y Combinator’s W24 cohort and has already secured paying customer trials from a range of companies, including Fortune 500 firms and Series B and C startups. Their fellow YC founders were among their first customers. The startup is now exiting its beta phase after raising $2.75 million in seed funding from investors, including Y Combinator, Rebel Fund, Afore Capital, and several other VC firms.
He noted that Openmart was strategic in its fundraising approach, setting a reasonable goal and resisting pressure to oversubscribe the round. They are following advice from their YC group partner, Gustaf Alstromer, to maintain 50% ownership through Series B. “It’s a pretty simple math problem,” He explained. “You want to dilute as little as possible. You only need [to raise] as much capital as you need to survive to the next round. How much money we need is a bottom-up calculation rather than I want as much money as possible.”
With AI enhancing productivity, Openmart plans to keep its engineering team small and efficient, minimizing the need for extensive capital. While the company’s initial focus is on aggregating data on local businesses, He mentioned plans to expand into other areas in the future. However, the team is mindful of the competitive landscape, particularly in established sectors like B2B software, where players like LinkedIn Sales Navigator and Crunchbase dominate.
Despite these plans for future expansion, Openmart remains committed to its roots. Wu added, “We want to be thought of as the experts at finding contacts for small and medium-sized businesses.”
