Algolia, the San Francisco search and discovery company, said on October 6, 2026 that it had acquired Velou, a New York startup that uses multimodal AI to pull structured product data out of retail catalog text and images. The companies did not disclose the terms.
Velou's team of six is joining Algolia. The startup served more than 50 enterprise customers among retailers and premium brands, according to Algolia's announcement.
Algolia said Velou's technology will become a layer underneath its Search, Recommendations, Personalization, Merchandising and Agent Studio products, with enrichment running continuously as catalogs change. Its existing APIs, SDKs and integrations will stay as they are, so retailers will not need to rebuild their setups.
What Velou built
Velou reads product images and descriptions and turns them into structured retail data: categories, attributes, values, synonyms and relationships between products. Each extracted attribute is checked against a curated retail taxonomy and linked to the evidence in the source text or image, so merchandisers can see why a product shows up for a given query. Algolia said Velou had spent eight years building that taxonomy and a product graph.
Velou's site also describes Commerce-1, a model trained for retail, and says enriched records can be written back into a retailer's existing commerce systems, according to Unite.ai. When it raised its seed round in 2024, the company described itself as an AI copilot for e-commerce, with integrations for SAP, Salesforce, Shopify and BigCommerce and customers in beauty, fashion and furniture.
Algolia cited two Velou customers. UK sportswear retailer Get The Label added more than 190,000 product attributes over six months and saw site search revenue rise 60%. UK fashion retailer Everything5pounds grew its catalog attributes by more than 85% and its search conversions by 33%. Algolia noted that such results may not carry over to every catalog.
“Algolia won search on speed. The future of discovery will be won on intelligence.”
Why Algolia is buying
In a blog post, Algolia CEO Stephen Lynch wrote that the company had spent years making search fast and tuning relevance on keyword, vector and behavioral signals, but lacked a way to understand what the products themselves are. Missing attributes are a common problem in retail catalogs, and merchants often spend their time fixing records by hand.
"Algolia won search on speed. The future of discovery will be won on intelligence," Lynch said in the announcement.
Algolia also pointed to AI shopping assistants such as ChatGPT, Copilot and Gemini, which choose products based on the underlying data rather than how a page looks. It cited Adobe Analytics figures showing that AI-referred traffic to US retail sites rose 62% year over year in July. Velou CEO Gavin Hewitt said that "the race that matters now is contextual and relevant product understanding."
The two companies already worked together: Value Add VC reported that Velou was an Algolia integration partner, feeding enriched attributes into Algolia search and personalization for its customers before the deal. The same report called Velou Algolia's second known AI acquisition, after it bought Romania's MorphL in 2021.
The founders and the funding
Velou was founded by Sadee Gamhewa, who was named founder and CEO when the company announced a $4 million seed round in January 2024. ANIMO Ventures led that round, with Ascend, Sentiero, Revelry, Startup Haven, SK Ventures and angel investors from SaaS and retail taking part. At the time, Velou said its customer base had doubled in the previous 12 months.
Gavin Hewitt, who previously worked at marketing-technology companies Bluecore and Attentive, joined Velou as chief operating officer and later became CEO; he was CEO at the time of the sale. Data providers give conflicting figures for Velou's later funding, and the companies did not say how much the startup raised in total.
What happens to customers
Algolia said it serves more than 18,000 customers, and it plans to offer Velou's enrichment to them as part of the existing platform rather than as a separate migration. The announcement did not say how Velou's own customers who do not use Algolia will be handled, or whether Velou will continue to sell its product on its own.
A busy market for AI product data
Algolia framed the deal around making retail catalogs readable by AI agents as well as by people. IDC research director Heather Hershey said in Algolia's release that "AI shopping agents change that, because they pick products based on what the data says, not how a page looks." For retailers, clean and complete product attributes are becoming as important for discovery as the search engine itself.
