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Guru Hariharan

Boomerang Commerce, a Santa Clara, Calif. startup led by former engineers Guru Hariharan and Madhusudhan Rao, has raised $8.5 million in series A financing from Trinity Ventures and Madrona Venture Group.

The company also is officially unveiling its first product today, a new Dynamic Price Optimizer that’s designed to help online retailers dynamically set the price on various products. Customers already using the service include Staples, Sears, Groupon Goods and RadioShack, with the company saying that the service can help boost revenues by an average of five percent.

“Price is a key factor driving online purchase decisions, and retailers need to continuously react to competitive price changes while keeping a firm eye on their profits,” said Hariharan. “We are applying portfolio theory, real-time machine learning and game theory to this complex problem, enabling retailers to compete like never before. The proof is in the numbers; our customers have seen significant and immediate revenue and profit growth based solely on price optimization.”

As a result of the funding, Karan Mehandru from Trinity Ventures and Scott Jacobson from Madrona have joined the board.

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