Hundreds of e-commerce sites booby-trapped with payment card skimming malware

Stock photo of a woman using a laptop and a credit card to make a purchase.

Enlarge (credit: Getty Images)

About 500 e-commerce websites were recently found to be compromised by hackers who installed a credit card skimmer that surreptitiously stole sensitive data when visitors attempted to make a purchase.

A report published on Tuesday is only the latest one involving Magecart, an umbrella term given to competing crime groups that infect e-commerce sites with skimmers. Over the past few years, thousands of sites have been hit by exploits that cause them to run malicious code. When visitors enter payment card details during purchase, the code sends them to attacker-controlled servers.

Fraud courtesy of Naturalfreshmall[.]com

Sansec, the security firm that discovered the latest batch of infections, said the compromised sites were all loading malicious scripts hosted at the domain naturalfreshmall[.]com.

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#biz-it, #ecommerce, #payment-skimmers, #websites

Marketplace platform Mirakl raises $555 million at $3.5 billion valuation

French startup Mirakl has closed a new Series E funding round of $555 million. Following this round, the company is now valued at $3.5 billion. Mirakl helps you launch a marketplace on your online store for your end customers or for your B2B clients. It’s a software-as-a-service marketplace, meaning that Mirakl manages the marketplace for you.

Silver Lake is leading the investment with existing investors 83North, Elaia Partners, Felix Capital and Permira also participating. With today’s funding round, Mirakl is experiencing a sharp valuation bump as the company closed a $300 million funding round at a $1.5 billion valuation last year.

Some of Mirakl’s clients include ABB, Accor, Airbus Helicopters, Carrefour, Express, Leroy Merlin, The Kroger Co and Toyota Material Handling.

Chances are you’re already familiar with marketplaces on online stores. If the e-commerce brand doesn’t have the item you’re looking for, they might be recommending some third-party sellers. You can buy the item from this third-party seller directly on the store you’re using. Mirakl helps you add a marketplace to your site.

On some online stores, marketplace transactions have overtaken in-house transactions. It’s a lucrative shift as e-commerce companies don’t own the inventory of third-party sellers. It frees up some capital to increase reach and online sales.

And that trend isn’t limited to consumer-facing online stores. B2B marketplaces are emerging. For instance, car manufacturers rely on many different suppliers. They could all list parts directly on a marketplace so that repair shops can easily find the right part to fix a car.

When you add a marketplace component, you switch from a one-to-many model to a many-to-many model. It means that you have to make sure that you’re taking advantage of your marketplace by partnering with the right third-party sellers. As a third-party seller, it also means that you need to list your products on as many marketplaces as possible.

That’s why the company has also built something called Mirakl Connect. The startup positions itself as a center piece of the marketplace ecosystem by connecting online stores with sellers. Mirakl customers can use Mirakl Connect to find third-party sellers. And third-party sellers can more easily list their products on Mirakl-compatible marketplaces.

With today’s funding round, Mirakl plans to increase the size of its engineering team. It’ll add 350 engineers on top of its team of 500. Similarly, the customer success team will double in size. In other words, things are going well for Mirakl, so let’s invest.

Image Credits: Mirakl

#e-commerce, #ecommerce, #europe, #france-newsletter, #fundings-exits, #marketplace, #mirakl, #online-store, #saas, #startups

Cartona gets $4.5M pre-Series A to connect retailers with suppliers in Egypt

Year-old startup Capiter announced last week that it raised a $33 million Series A to digitize Egypt’s traditional offline retail market.

It’s looking to take a large pie in the budding e-commerce and retail play, where multiple startups are pulling their weight including Cartona, also a year-old startup out of Egypt.

Today, Cartona is announcing that it has raised a $4.5 million pre-Series A funding round to connect retailers and manufacturers via an application.

The company confirmed that Dubai-based venture capital firm Global Ventures led the round, with Pan-African firm Kepple Africa, T5 Capital and angel investors also participating.

Cairo-based Cartona, founded in August 2020, focuses on solving the supply-chain and operational challenges of players in the fast-moving consumer goods (FMCG) industry by helping buyers access products from sellers on a single platform.

Buyers, in this case, are retailers, while sellers are FMCG companies, distributors and wholesalers.

The problem retailers in Egypt and most of Africa face mainly revolves around limited access to suppliers. There are also issues around transparency in market prices, which are dependent on traditional logistical capabilities.

For suppliers, the lack of data and inability to make data-backed decisions to improve margins and aid growth add up to unoptimized warehouses. 

“The trade market is completely inefficient and it’s not good for the supplier nor the manufacturers, and it’s definitely not good for retailers,” CEO Mahmoud Talaat told TechCrunch in an interview. “So we came up with the idea of Cartona, which is basically a fully light-asset model that connects manufacturers and wholesalers to retailers.”

Talaat founded the company alongside Mahmoud Abdel-Fattah. Before Cartona, Abdel-Fattah founded Speakol, a MENA-focused adtech platform serving 60 million monthly users, while Talaat was the chief commercial officer of agriculture company Lamar Egypt.

Cartona works as an asset-light marketplace. On the platform, grocery retailers can get orders from a curated network of sellers. The company says this way, it can provide visibility through real-time price comparisons and clarity on delivery times.

Also, FMCGs and suppliers can optimize their go-to-market execution through the use of data and analytics. Cartona tops it off by providing embedded finance and access to credit to retailers and suppliers.

Cartona makes money through all these processes. It takes a commission on orders made, charges suppliers for running advertising to merchants (since they compete for the latter’s attention), and provides market insights on buyer behavior, price competition and market share.

“It is time to capitalize on technology beyond warehouses and trucks. Data and technology will transform traditional retail to a digitally native one, which in return will drastically improve the supply chain efficiency,” Abdel-Fattah said about how the company sells information to retailers and suppliers.

Cartona has over 30,000 merchants on its platform. Together, they have processed more than 400,000 orders with an annualized gross merchandise value of EGP 1 billion (~$64 million). Cartona also works with more than 1,000 distributors, wholesalers and 100 FMCG companies, offering consumers more than 10,000 products, including dry, fresh and frozen food.

The company’s business and revenue model is similar to other companies in this space, but the main difference lies in whether they own assets or not.

Taking a look at the players in Egypt, for instance, MaxAB operates its warehouses and fleets; Capiter uses a hybrid model in which it rents these assets and owns inventory when dealing with high-turnover products. But Cartona solely manages an asset-light model.

The CEO tells me that he thinks this model works best for all the stakeholders involved in the retail market. He argues that not owning assets and leasing the ones on the ground shows that the company is trying to improve the operations of existing suppliers and merchants instead of displacing them.

I believe that the infrastructure already exists. We already have many warehouses, many small and medium-sized entrepreneurs, and wholesalers and distributors and companies that have a lot of assets. If you want to fix the problem, we think one should enable the people who are strategically located in small streets all over Egypt and have the infrastructure but don’t have the technology needed to optimize their warehouses and carts.”

The current margins for suppliers with warehouses are slim, and Cartona provides the technology — an inventory and ordering system — to provide efficiency in its supply chain.

The general partner at lead investor Global Ventures, Basil Moftah, said in a statement that Cartona’s technology and not owning inventory proved critical in the firm’s decision to back the company.

“The trade market is one of the most sophisticated, yet [it is] characterized by multiple critical inefficiencies across the value chain,” he said.Cartona’s asset-light approach tackles those inefficiencies by optimizing the trade process in unique ways and does so with minimal capital spent.”

Proceeds of the investment focus on improving this technology, Talaat said. In addition, Cartona is expanding its team and operations beyond two cities in Egypt — Cairo and Alexandria — to other parts.

A longer-term plan might include horizontal and vertical product expansion into pharmaceuticals, electronics and fashion.

#africa, #b2b-e-commerce-retail, #e-commerce, #ecommerce, #egypt, #funding, #global-ventures, #recent-funding, #retail, #startups, #supply-chain, #tc

Bzaar bags $4M to enable US retailers to source home, lifestyle products from India

Small businesses in the U.S. now have a new way to source home and lifestyle goods from new manufacturers. Bzaar, a business-to-business cross-border marketplace, is connecting retailers with over 50 export-ready manufacturers in India.

The U.S.-based company announced Monday that it raised $4 million in seed funding, led by Canaan Partners, and including angel investors Flipkart co-founder Binny Bansal, PhonePe founders Sameer Nigam and Rahul Chari, Addition founder Lee Fixel and Helion Ventures co-founder Ashish Gupta.

Nishant Verman and Prasanth Nair co-founded Bzaar in 2020 and consider their company to be like a “fair without borders,” Verman put it. Prior to founding Bzaar, Verman was at Bangalore-based Flipkart until it was acquired by Walmart in 2018. He then was at Canaan Partners in the U.S.

“We think the next 10 years of global trade will be different from the last 100 years,” he added. “That’s why we think this business needs to exist.”

Traditionally, small U.S. buyers did not have feet on the ground in manufacturing hubs, like China, to manage shipments of goods in the same way that large retailers did. Then Alibaba came along in the late 1990s and began acting as a gatekeeper for cross-border purchases, Verman said. U.S. goods imports from China totaled $451.7 billion in 2019, while U.S. goods imports from India in 2019 were $87.4 billion.

Bzaar screenshot. Image Credits: Bzaar

Small buyers could buy home and lifestyle goods, but it was typically through the same sellers, and there was not often a unique selection, nor were goods available handmade or using organic materials, he added.

With Bzaar, small buyers can purchase over 10,000 wholesale goods on its marketplace from other countries like India and Southeast Asia. The company guarantees products arrive within two weeks and manage all of the packaging logistics and buyer protection.

Verman and Nair launched the marketplace in April and had thousands users in three continents purchasing from the platform within six months. Meanwhile, products on Bzaar are up to 50% cheaper than domestic U.S. platforms, while SKU selection is growing doubling every month, Verman said.

The new funding will enable the company to invest in marketing to get in front of buyers and invest on its technology to advance its cataloging feature so that goods pass through customs seamlessly. Wanting to provide new features for its small business customers, Verman also intends to create a credit feature to enable buyers to pay in installments or up to 90 days later.

“We feel this is a once-in-a-lifetime shift in how global trade works,” he added. “You need the right team in place to do this because the problem is quite complex to take products from a small town in Vietnam to Nashville. With our infrastructure in place, the good news is there are already shops and buyers, and we are stitching them together to give buyers a seamless experience.”

 

#alibaba, #bzaar, #canaan-partners, #china, #ecommerce, #enterprise, #flipkart, #funding, #import, #market, #nishant-verman, #prasanth-nair, #recent-funding, #saas, #startups, #tc

Flippa raises $11M to match online asset and business buyers, sellers

Flippa, an online marketplace to buy and sell online businesses and digital assets, announced its first venture-backed round, an $11 million Series A, as it sees over 600,000 monthly searches from investors looking to connect with business owners.

OneVentures led the round and was joined by existing investors Andrew Walsh (former Hitwise CEO), Flippa co-founders Mark Harbottle and Matt Mickiewicz, 99designs, as well as new investors Catch.com.au founders Gabby and Hezi Leibovich; RetailMeNot.com founders Guy King and Bevan Clarke; and Reactive Media founders Tim O’Neill and Tim Fouhy.

The company, with bases in both Austin and Australia, was started in 2009 and facilitates exits for millions of online business owners that operate on e-commerce marketplaces, blogs, SaaS and apps, the newest being Shopify, Blake Hutchison, CEO of Flippa, told TechCrunch.

He considers Flippa to be “the investment bank for the 99%,” of small businesses, providing an end-to end platform that includes a proprietary valuation product for businesses — processing over 4,000 valuations each month — and a matching algorithm to connect with qualified buyers.

Business owners can sell their companies directly through the platform and have the option to bring in a business broker or advisor. The company also offers due diligence and acquisition financing from Thrasio-owned Yardline Capital and a new service called Flippa Legal.

“Our strategy is data,” Hutchison said. “Users can currently connect to Stripe, QuickBooks Online, WooCommerce, Google Analytics and Admob for apps, which means they can expose their online business performance with one-click, and buyers can seamlessly assess financial and operational performance.”

Online retail, as a share of total retail sales, grew to 19.6% in 2020, up from 15.8% in 2019, driven largely by the global pandemic as sales shifted online while brick-and-mortar stores closed.

Meanwhile, Amazon has 6 million sellers, and Shopify sellers run over 1 million businesses. This has led to an emergence of e-commerce aggregators, backed by venture capital dollars, that are scooping up successful businesses to grow, finding many through Flippa’s marketplace, Hutchison said.

Flippa has over 3 million registered users and added 300,000 new registered users in the past 12 months. Overall transaction volume grows 100% year over year. Though being bootstrapped for over a decade, the company’s growth and opportunity drove Hutchison to go after venture capital dollars.

“There is a huge movement toward this being recognized as an asset class,” he said. “At the moment, the asset class is undervalued and driving a massive swarm as investors snap up businesses and aggregate them together. We see the future of these aggregators becoming ‘X company for apps’ or ‘X for blogs.’ ”

As such, the new funding will be used to double the company’s headcount to more than 100 people as it builds out its offices globally, as well as establishing outposts in Melbourne, San Francisco and Austin. The company will also invest in marketing and product development to scale its business valuation tool that Hutchison likens to the “Zillow Zestimate,” but for online businesses.

Nigel Dews, operating partner at OneVentures, has been following Flippa since it started. His firm is one of the oldest venture capital firms in Australia and has 30 companies in its portfolio focused on healthcare and technology.

He believes the company will create meaningful change for small businesses. The team combined with Flippa’s ability to connect buyers and sellers puts the company in a strong leadership position to take advantage of the marketplace effect.

“Flippa is an incredible opportunity for us,” he added. “You don’t often get a world-leading business in a brand new category with incredible tailwinds. We also liked that the company is based in Australia, but half of its revenue comes from the U.S.”

#advertising-tech, #amazon, #artificial-intelligence, #blake-hutchison, #ecommerce, #enterprise, #flippa, #funding, #mark-harbottle, #matt-mickiewicz, #nigel-dews, #oneventures, #online-marketplace, #online-retail, #recent-funding, #saas, #shopify, #startups, #tc

9am.health launches with $3.7M to tackle virtual diabetes care

Founders like to create companies around what they know, and Frank Westermann and Anton Kittelberger know diabetes.

They met and bonded over both having type 1 diabetes — Westermann was diagnosed over 25 years ago — and started the MySugr app for diabetes self-management in 2012 (they won a TC pitch-off back in 2011). Four years later, Westermann moved to the U.S. from Austria to introduce MySugr stateside before the company was acquired by Roche for $100 million in 2017.

The pair moved on to their next journey, also in diabetes, starting 9am.health in April, a virtual diabetes clinic designed to provide people living with prediabetes and type 2 diabetes access to personalized care and affordable medications from their homes. 9am.health’s clinic was launched in August.

Today, the San Diego-based company announced a $3.7 million seed round from Founders Fund, Define Ventures, Speedinvest and iSeed Ventures to target the 1 in 3 people living with diabetes in the United States, Westermann told TechCrunch.

“We understand the day-to-day challenges that people with prediabetes and type 2 diabetes have,” he added. “Access to care is the real issue, and rather than have patients wait weeks to get an appointment, we send a kit with tests to your home, and you send it back to us.”

9am.health kicked off in Texas and California, and is now available in 33 states. It is finding patients through digital outreach, community work and hospitals.

Even with insurance, the average person living with diabetes spends about $16,750 per year on medical expenses and has approximately 2.3 times higher the costs than if they didn’t have the disease. Instead, patients can subscribe to 9am.health for $40 per month; that includes online prescription shipping, unlimited personal medical care, medications to manage diabetes, hypertension or hyperlipidemia and at-home lab tests.

Westermann sees other companies working in the diabetes space, but says 9am.health is unique in providing “a digital front door for entire diabetes care,” while others focus on specific pain points. By taking that whole approach, he sees opportunity in going beyond diabetes to the general chronic disease realm as many living with diabetes — 98% of Americans in fact — also have other comorbidities like high blood pressure, high cholesterol and mental health issues, he added.

The new funding will enable the company to grow its team and carve out some of the digital diabetes market share that was valued at $13 billion in 2020 and is forecasted to grow annually by 18.8% through 2027. 9am.health will also invest in advancing its virtual screening ability and expand the types of medication it can offer.

9am.health diabetes kit

“We want to tear down the barriers and make care as easy as possible and managing diabetes part of life,” Westermann said. “When you live with chronic illness, it is an everyday thing, and sometimes you feel good, and others days you don’t. That’s why we named the company 9am.health because you can wake up at 9 a.m. and start your diabetes journey all over again.”

Lynne Chou O’Keefe, founder and managing partner at Define Ventures, says the future of healthcare is going to be more consumer-focused and will be wrapped around the patient’s care journey. She considers 9am.health to be leading this type of care with a platform that bundles education, community, coaching and care that is direct-to-consumer.

Chou O’Keefe has been investing in healthcare her entire VC career, and sat on the board of Livongo for four years. Through that experience she learned how patients struggle with their care decisions, and finds 9am.health’s founders to have a similar deep expertise and understanding in diabetes, especially with the success they had with MySugr.

“The last place you should receive healthcare is in the doctor’s office, while the first place should be wherever you are,” she added. “This is a very different way than what the healthcare system is today. We feel that people want to manage their diabetes, but then go on and live their lives.”

 

#9am-health, #anton-kittelberger, #apps, #chronic-disease, #define-ventures, #diabetes, #ecommerce, #founders-fund, #frank-westermann, #funding, #health, #healthcare, #high-blood-pressure, #hypertension, #iseed-ventures, #lynne-chou-okeefe, #medicine, #my-sugr, #prediabetes, #recent-funding, #roche, #speedinvest, #startups, #tc

Amazon bets on Hindi voice shopping to reach wider India

Speaking of Amazon — which is reportedly conducting an investigation to find whether its lawyers bribed government officials in India — the company announced today it plans to roll out the voice shopping experience feature in the Hindi language in the South Asian market ahead of the Diwali festival in early November.

The e-commerce giant, which rolled out the voice shopping experience in English last year, said the feature in the Hindi language — which will roll out in “coming weeks” — will enable users to search for products and check their order status using voice commands such as “joote dikhao,” which is Hindi for ‘show me shoes.’

Only 10% of India’s 1.3 billion people speak English. And in recent years, voice search has dramatically surged in India as many new internet users find it difficult to type on virtual keyboards. Scores of tech companies — including Amazon’s rival, Flipkart — have in recent years made push to add support for more regional languages, or introduce support for voice queries — and in some cases, do both.

Amazon’s voice shopping experience will be available to only Android users, the company said.

“Since the launch of voice shopping in 2020, we are humbled to see by the adoption of voice by Amazon.in customers to fulfil their shopping needs has grown by 2X year-on-year. We will continue to focus on bringing new features for our customers on voice to make their shopping experience exciting and fulfilling,” said Kishore Thota, Director of Customer Experience and Marketing at Amazon India, in a statement.

The new rollout is part of a broader localization push from the company. Amazon said today that its website and apps are now also available in Marathi and Bengali. The website already supports five additional regional languages — Hindi, Kannada, Malayalam, Tamil, and Telugu.

“Our aim with regional language shopping experience is to make ecommerce accessible, relevant and convenient for customers. Every month, tens of millions of customers visit Amazon.in in regional languages and 90% of the customers are from tier 2 and below cities. This festive season we are happy to expand the Amazon.in experience for our customers in Marathi and Bengali,” said Thota.

Indian news outlet The Ken reported last week that Amazon was also working on building a voice-based payments authentication system. The company declined to comment.

#amazon, #amazon-india, #apps, #asia, #ecommerce, #flipkart, #google, #india

Demand Curve: How to get social proof that grows your startup

When people are uncertain, they look to others for behavioral guidance. This is called social proof, which is a physiological effect that influences your decisions every day, whether you know it or not.

At Demand Curve and through our agency Bell Curve, we’ve helped over 1,000 startups improve their ability to convert cold traffic into repeat customers. We’ve found that effectively using social proof can lead to up to 400% improvement in conversion.

This post shares exactly how to collect and use social proof to help grow your SaaS, e-commerce, or B2B startup.

Surprisingly, we’ve actually seen negative reviews help improve conversion rates. Why? Because they help set customer expectations.

How businesses use social proof

Have you ever stopped to check out a restaurant because it had a large line of people out front? That wasn’t by chance.

It’s common for restaurants to limit the size of their reception area. This forces people to wait outside, and the line signals to people walking past that the restaurant is so good it’s worth waiting for.

But for Internet-based businesses, social proof looks a bit different. Instead of people lining up outside your storefront, you’re going to need to create social proof that resonates with your target customers — they’ll be looking for different clues to signal whether doing business with your company is “normal” or “acceptable” behavior.

Social proof for B2B

People love to compare themselves to others, and this is especially true when it comes to the customers of B2B businesses. If your competitor is able to get a contract with a company that you’ve been nurturing for months, you’d be upset (and want to know how they did it).

Therefore, B2B social proof is most effective when you display the logos of companies you do business with. This signals to people checking out your website that other businesses trust you to deliver on your offer. The more noteworthy or respected the logos on your site, the stronger the influence will be.

Social proof for SaaS

Depending on the type of SaaS product or service you’re selling, you’ll either be selling to an individual or to a business. The strategy remains the same, but the channels will vary slightly.

The most effective way to generate social proof for SaaS products is through positive reviews from trusted sources. For consumer SaaS, that will be through influential bloggers and YouTubers speaking highly of your product. For B2B SaaS, it will be through positive ratings on review sites like G2 or Capterra. Proudly display these testimonials on your site.

Social proof for e-commerce brands

E-commerce brands will typically sell directly to an individual through ads, but because anyone can purchase an ad, you’re going to need to signal trust in other ways. The most common way we see e-commerce brands building social proof is by nurturing an organic social media following on Instagram or TikTok.

This signals to new customers that you’ve gotten the seal of approval from others like them. Having an audience also allows you to showcase user-generated content from your existing customers.

How to collect social proof

There are five avenues startups can tap to collect social proof:

  1. Product reviews
  2. Testimonials
  3. Public relations and earned media
  4. Influencers
  5. Social media and community

Here are a few tactics we’ve used to help startups build social proof.

#assistant, #cloud, #column, #e-commerce, #e-sports, #ec-column, #ec-growth-marketing, #ecommerce, #growth-marketing, #marketing, #review-tools, #saas, #social-media, #social-networks, #social-proof, #startups, #user-generated-content, #verified-experts

Choices and constraints: How DTC companies decide which strategy to follow

Companies typically have to settle on strategies that align with their customers, employees, investors, and regulators. The more they know about how the other side will decide, the clearer their own strategies become.

If regulators always prefer choice for consumers, then it is easy for a platform to allow multiple payment choices: Shopify allows multiple payment options from its partners, Apple doesn’t.

By regulatory intervention, it will have to now.

Nash equilibrium and Netflix time

Nash equilibrium is a fascinating, post-facto explanation for some of the interesting decisions you will often see in business.

In simple terms, Nash equilibrium states that if you have clarity on the other side’s decision, you can make yours without regret. In other words, there is no incentive to change strategy once each side knows what the optimal position of the other side is, in their combined transaction.

All physical products cannot escape retail, because ignoring retail means a smaller serviceable market. But it is a choice companies can make.

I see this playing out every weekend at home. I don’t mind reading a book alone or watching Netflix with my kid, but when I am available for Netflix and my kid decides to read a book, it is a bummer.

DTCs, DNVBs and game theory

In DTC, how companies decide their omnichannel strategy depends on how well they know what their customers’ choices are and what their ideal strategy will be. In many transactions, constraints are actually good forcing functions — they narrow down choices and help you arrive at an equilibrium faster and cheaper.

The marketing and public-market filing languages make for a fascinating read into the minds of companies.

When Warby Parker filed its IPO prospectus last month, the company referred to its digitally-native status in the past tense. The model was effectively flipped in 2020, as its share of online sales to total sales dropped from 65% to 40%. Meanwhile, its physical store count increased from 126 to 145.

#d2c, #direct-to-consumer, #dtc, #ec-column, #ec-ecommerce-and-d2c, #ecommerce, #growth-marketing, #marketing, #marketing-strategy, #merchandising, #omnichannel, #online-shopping, #startups, #verified-experts

Constructor finds $55M for tech that powers search and discovery for e-commerce businesses

One of the biggest problems in the world of e-commerce is the predicament of shopping cart abandonment: when shoppers aren’t getting to what they want fast enough — whether it’s finding the right item, or paying for it in a quick and easy way — they bounce. That singular problem is driving a wave of technology development to make the experience ever more seamless, and today one of the companies closely involved in that space is announcing some funding on the back of healthy growth.

Constructor, which has built technology that powers search and product discovery tools for e-commerce businesses, has picked up $55 million in a Series A round of funding. Constructor says that it powers “billions” of queries every month, with revenues growing 233% in the last year. Customers it works with include Sephora, Walmart’s Bonobos, Backcountry and many other big names.

The round is being led by Silversmith Capital Partners — which coincidentally, just today, led another round for an e-commerce startup, Zonos.

It is joined by a long list of notable individual investors. They include David Fraga, former president of InVision; Kevin Weil, former head of product at Twitter and Instagram; Jason Finger, founder of Seamless; Carl Sparks, ex-CEO of Travelocity; Robyn Peterson, CTO at CNN; Dave Heath, founder of Bombas; Ryan Barretto, president at Sprout Social; Melody Hildebrandt, EVP engineering and CISO at FOX; Zander Rafael, co-founder of Better.com; and Seth Shaw, CRO at Airtable. Cap Table Coalition — a firm that helps underrepresented-background investors back up-and-coming startups — was also involved. Fraga is joining Constructor’s board with this round.

The last year and a half has been a bumper one for the world of e-commerce — with more traffic, transactions and retailers moving online in the wake of social distancing measures impacting in-person, physical shopping. But that has also exposed a lot of the cracks in how e-commerce works (or doesn’t work, as the case may be).

One of the more dysfunctional areas is search and discovery. As most of us have unfortunately learned first-hand, when we search for things in the search window of an online store, it’s almost always the case that the results don’t have what we want.

When we browse as we might in a physical store, because we are not sure of what we want, all too often we are not prompted with pictures of things we might actually like to buy. They may be there — we typically visit sites because we either already know them, or have seen something we like elsewhere — but nevertheless, finding what we might actually like to buy can take a lot of time, and in many cases may never happen at all.

Eli Finkelshteyn, Constructor’s CEO and founder, says that one of the issues is that search and discovery are often built as static experiences: they are designed to meet a one-size-fits-all model where site architects have effectively guessed at what a shopper might want, and built for that. This is one area that Constructor has rethought, specifically by making search and discovery more dynamic and responsive to what’s happened before you ever visit a site.

“One of the things wrong with product discovery was that prescriptively sites show you what they think is valuable to you,” he said. “We think the process should be descriptive.”

As an example, he talked about Cheetos. Sometimes people who might want to buy these start out by navigating to the potato chip category. In many static searches, those results might not include Cheetos. Some people might abandon their search altogether (bounce), but some might navigate away from that and search specifically for Cheetos and add them to their carts. In a descriptive and more dynamic environment, Finkelshteyn believes that these two flows should subsequently inform all future chip searches.

“We take into account as much data as we can learn from, and that list is always growing,” he said. “The goal is anything we can learn from should become part of the user experience.”

Google is the current, undisputed leader in the world of search, and it too uses a lot of dynamic, AI-based tools to learn and tweak how it searches and what results it produces.

Interestingly it hasn’t extended as much of this to third parties as you might think. The company wound down its own site search product in 1997 and now if you look for this you are redirected to the company’s enterprise search suite.

There are however others that have also stepped into that void to provide services that compete with Constructor, including the likes of Algolia, Yext, Elasticsearch and more. Finkelshteyn believes that among all of these, none have managed yet to provide a service like Constructor’s that learns and adjusts its results constantly based on search and browsing activity.

This is one reason the company has stood out with its customers, and with investors.

“Constructor has built a search and discovery platform that is truly making a difference for enterprise retailers. They are providing customers with comprehensive and optimized search and discovery that is unmatched in the market,” said Sri Rao, Constructor board member and general partner at Silversmith Capital Partners, in a statement. “We are excited to partner with the Constructor team as they continue to revolutionize search and discovery capabilities for retailers across all platforms.”

Looking forward, there will be some interesting opportunities ahead for Constructor to take its search and discovery tools to new frontiers. These could include ways to bring in and account for shoppers on third-party platforms — currently Constructor does not power experiences on, say, social media, so that is one potential area to explore — as well as more offline experiences, critical as retailers and shoppers take on more blended approaches that might start online and finish in stores, or proceed the other way around, or find users walking around with their phones to shop even as they are in physical stores.

#algolia, #artificial-intelligence, #better-com, #board-member, #bonobos, #carl-sparks, #ceo, #co-founder, #constructor, #cto, #david-fraga, #e-commerce, #ecommerce, #founder, #funding, #google, #google-search, #invision, #jason-finger, #kevin-weil, #marketing, #merchandising, #online-shopping, #partner, #president, #retail, #seamless, #sephora, #shopping, #silversmith-capital-partners, #social-media, #sprout-social, #technology-development, #travelocity, #yext, #zonos

Sustainable e-commerce startup Olive now ships beauty products, in addition to apparel

Earlier this year, a startup called Olive launched its new shopping site and app with the goal of making e-commerce more efficient, convenient, and sustainable by offering a way for consumers to aggregate their orders from across retailers into single shipments that arrive in reusable packaging, not cardboard. If items need to be returned, those same packages are reused. Otherwise, Olive will return to pick them up. Since its February 2021 debut, the company has grown to include over 100 retailers, predominately in the fashion space. Today, it’s expanding again by adding support for another 25 beauty retailers.

Launch partners on the new effort include brands like Supergoop!, Kora Organics, Pai Skincare, Erno Laszlo, Jecca Blac, Sahajan, Clark’s Botanicals, NuFace, Purlisse, Cover FX, LYS Beauty, SiO Beauty, Peace Out Skincare, Koh Gen Do, Julep Beauty, In Common Beauty, Indie Lee, Glow Recipe, Ursa Major, RMS Beauty, Ceremonia, Sweet Chef, Follain, and BalmLabs.

They join Olive’s numerous apparel and accessory retailers like Adidas, Superga, Rag & Bone, Birdies, Vince, Goop, Khaite, and Veronica Beard, among others.

To support the expansion, Olive also developed a new set of reusable packaging that has protective elements for more damageable items. While before, the company had offered a variety of packages like soft-sided garment bags and various sizes of more rigid containers (see below), it’s now introducing its own alternative to the air bubble strips you’ll find in most Amazon boxes these days. Olive’s version is integrated into its reusable packaging and can be easily deflated by the customer when it’s time to return the package at pickup.

Image Credits: Olive, founder Nate Faust

The idea for Olive is a timely one. Due to the Covid-19 pandemic, e-commerce adoption has soared. But so has consumers’ guilt. Multiple packages land on doorsteps every week, with cardboard and plastic to recycle — if that’s even available in your area. Delivery trucks — Amazon, UPS, FedEx, and others — are now a daily spectacle on every city street. Meanwhile, market leaders like Amazon and Walmart seem largely interested in increasing the speed of delivery, not necessarily the efficiency and sustainability. (Amazon allows shoppers to pick an Amazon Day delivery, for consolidated shipments, but it’s opt-in.)

Olive founder Nate Faust says he was inspired to build the company after realizing how little interest there was from larger e-commerce players in addressing some of the inconveniences and inefficiencies in the market. Faust had previously served as a vice president at Quidsi (which ran Diapers.com and Soap.com and sold to Amazon), then co-founder and COO at Jet, which was acquired by Walmart for $3.3 billion. Before Olive, he was a senior vice president at Walmart.

After some soul searching, he realized he wanted to build something in the e-commerce space that was focused more on the social and environmental impact, not just on driving growth and consumption.

Image Credits: Olive

“I had an epiphany one evening when taking out the trash and recycling,” Faust explains. “It’s pretty crazy that we’re this far into e-commerce and this is the status quo delivery experience —  all this waste, which is both an environmental issue and a hassle for consumers,” he says. “And the bigger issue than the packaging is actually the fact that the majority of those packages are delivered one at a time, and those last-mile emissions are actually the biggest contributor of carbon emissions in the post-purchase e-commerce supply chain.”

Consumers may not think about all the issues, because many of them are hidden, but they do struggle in other ways beyond dealing with the waste. Returns are still a hassle — so much so, that Amazon now allows customers to go to Kohl’s where it’s partnered on in-store return kiosks that also help the brick-and-mortar retailer increase their own foot traffic.

Plus, consumers who shop from different sites have to set up online accounts over and over, entering in addresses and payment information many times, which is an annoyance. Olive offers the convenience of an Amazon-like one-stop-shop experience on that front.

Meanwhile, Olive addresses the return issue by allowing consumers to simply place their unwanted items back in Olive’s packaging then leave them on their doorstep or with the building’s doorman for return. It works with both the USPS and a network of local carriers to serve the customers in its current footprint, which is about 100 million U.S. consumers on both coasts.

While customers don’t have to deal with packaging, it hasn’t been entirely eliminated from the equation at this point. Olive today partners with retailers who ship packages to its own west coast and east coast warehouses, where they repackage them into the reusable containers to deliver to customers. Right now, that means Olive is responsible for the recycling issues. But it’s working with its brand partners to have them pack orders directly into the reusable packaging from the start — before shipping to Olive’s consolidation warehouses for delivery. Today, it has a few retailers on board with this effort, but it hopes that will eventually expand to include all partners.

The company generates revenue on an affiliate commission model, which works for now. But over time, it may need to evolve that business model over time, as its customer base and partnerships grow. At present, around 10,000 consumers have used Olive, ahead of any large-scale marketing and customer acquisition efforts on the startup’s part.

For now, New York-based Olive is growing its business by way of a fundraise of around $15 million from investors including Invus, Primary Venture Partners, and SignalFire.

#adidas, #amazon, #birdies, #diapers-com, #e-commerce, #east-coast, #ecommerce, #fedex, #goop, #kohls, #marketing, #nate-faust, #new-york, #online-shopping, #primary-venture-partners, #product-management, #quidsi, #retailers, #reuse, #soap-com, #startups, #united-states, #usps, #walmart, #west-coast

SmarterTravel sheds HopJump name, begins a new journey with $9.5M round

Travel startups continue to rake in venture capital dollars as more people become comfortable traveling amid the global pandemic. The latest is SmarterTravel, which brought in $9.5 million in Series B funding co-led by Link Ventures and Second Alpha, with existing investors also participating.

In addition to the fundraise, the company, a provider of personalized travel recommendations and targeted travel content, announced its name change from HopJump, which reflects the company’s renewed vision of providing an informative online travel experience, CEO Jordan Staab told TechCrunch.

Jordan Staab, CEO of SmarterTravel. Image Credits: SmarterTravel

SmarterTravel has 7 million email newsletter subscribers and uses proprietary artificial intelligence fixes to give customers travel information and discounts. The company writes articles on every facet of travel to inform customers, especially now with airlines, hotels and countries placing certain restrictions on travel.

“The travel consumer is changing how they absorb information,” Staab said. “The consumer is coming to us instead of visiting 20 websites before they book. Before, you might have combed through reviews, but now you just want an expert to tell you, and that is what we are.”

HopJump was started in 2018 by Staab as a digital marketing agency helping big brands with user acquisition campaigns. As it was building up to an initial public offering, Staab said the company wanted to move into building its own brand and saw an opportunity in travel, which accounts for a big market — 10% of global gross domestic product, he added.

The company went on to provide hotel discount travel prices to consumers but found it to be challenging. There are a lot of nuances and different approaches for offering four-star hotel rooms for two-star prices and bundling tactics, Staab explained.

“We fell in love with uncomplicating the process,” he said. “Consumers just want a good price from a company they trust, and that is what we set out to solve.”

In January 2020, the company launched its first product and had 60 members join in the first few months, but then the global pandemic hit. Suddenly, HopJump went from managing rapid growth to managing how the company might shut down.

Still eager to stay in travel, the company pivoted back to marketing so it could continue examining the travel industry, he said. While the company was figuring out its next move, Staab said folks at SmarterTravel were helpful to them, and when he heard that its parent company, TripAdvisor, was needing to make layoffs, and that division was going to be let go, he decided to purchase that asset along with seven others, including Airfarewatchdog, Family Vacation Critic and Oyster. The deal closed in 2020.

Lisa Dolan, managing director at Link Ventures, said that SmarterTravel’s growth was one of the drivers of her firm’s investment. When no one was traveling due to COVID, the company acquired travel companies and made it through the pandemic while other startups in the space were struggling.

She also cited its strong revenue-generating business on the email side and that it capitalized on the fact that even in the pandemic, people were conducting web searches for car rentals, things to do in certain cities and looking for vacation inspiration.

SmarterTravel is going after a U.S. travel and tourism industry valued at $580.7 billion in 2019. It is also not the only one to gain investor attention recently. For example, just over the past month companies like Thatch raised $3 million for its platform aimed at travel creators, travel tech company Hopper brought in $175 million, Wheel the World grabbed $2 million for its disability-friendly vacation planner and Elude raised $2.1 million to bring spontaneous travel back to a hard-hit industry.

Meanwhile, the funding will drive SmarterTravel’s aim to grow rapidly in terms of getting its name out there, building new travel products and hiring key staff. The company already has 50 people, but needs more, Staab said.

“Travel has had a tough couple of years, but some pockets of it are back, and we are seeing that,” he added. “In a year that should have been a bad year, our growth has been good. We were up eight times in revenue in the past 12 months. We are growing, profitable and have extra funding to lean into the growth. It is not going to be easy growth, but we are well-positioned to understand how to do it.”

 

#advertising-tech, #artificial-intelligence, #digital-marketing, #ecommerce, #funding, #hopjump, #jordan-staab, #link-ventures, #lisa-dolan, #recent-funding, #second-alpha, #smartertravel, #startups, #tc, #tourism, #travel, #travel-industry, #travel-startups, #travel-tech, #tripadvisor

Zonos banks $69M to develop APIs for democratizing cross-border commerce

Cross-border commerce company Zonos raised $69 million in a Series A, led by Silversmith Capital Partners, to continue building its APIs that auto classify goods and calculate an accurate total landed cost on international transactions.

St. George, Utah-based Zonos is classifying the round as a minority investment that also included individual investors Eric Rea, CEO of Podium, and Aaron Skonnard, co-founder and CEO of Pluralsight. The Series A is the first outside capital Zonos has raised since it was founded in 2009, Clint Reid, founder and CEO, told TechCrunch.

As Reid explained it, “total landed cost” refers to the duties, taxes, import and shipping fees someone from another country might pay when purchasing items from the U.S. However, it is often difficult for businesses to figure out the exact cost of those fees.

Global cross-border e-commerce was estimated to be over $400 billion in 2018, but is growing at twice the rate of domestic e-commerce. This is where Zonos comes in: The company’s APIs, apps and plugins simplify cross-border sales by providing an accurate final price a consumer pays for an item on an international purchase. Businesses can choose which one or multiple shipping carriers they want to work with and even enable customers to choose at the time of purchase.

“Businesses can’t know all of a country’s laws,” Reid added. “Our mission is to create trust in global trade. If you are transparent, you bring trust. This was traditionally thought to be a shipping problem, but it is really a technology problem.”

As part of the investment Todd MacLean, managing partner at Silversmith Capital Partners, joined the Zonos board of directors. One of the things that attracted MacLean to the company was that Reid was building a company outside of Silicon Valley and disrupting global trade far from any port.

He says while looking into international commerce, he found people wound up being charged additional fees after they have already purchased the item, leading to bad customer experiences, especially when a merchant is trying to build brand loyalty.

Even if someone chooses not to purchase the item due to the fees being too high, MacLean believes the purchasing experience will be different because the pricing and shipping information was provided up front.

“Our diligence said Zonos is the only player to take the data that exists out there and make sense of it,” MacLean said. “Customers love it — we got the most impressive customer references because this demand is already out there, and they are seeing more revenue and their customers have more loyalty because it just works.”

In fact, it is common for companies to see 25% to 30% year over year increase in sales, Reid added. He went on to say that due to fees associated with shipping, it doesn’t always mean an increase in revenue for companies. There may be a small decrease, but a longer lifetime value with customers.

Going after venture capital at this time was important to Reid, who saw global trade becoming more complex as countries added new tax laws and stopped using other trade regulations. However, it was not just about getting the funding, but finding the right partner that recognizes that this problem won’t be solved in the next five years, but will need to be in it for the long haul, which Reid said he saw in Silversmith.

The new investment provides fuel for Zonos to grow in product development and go-to-market while also expanding its worldwide team into Europe and Asia Pacific. Eighteen months ago, the company had 30 employees, and now there are over 100. It also has more than 1,500 customers around the world and provides them with millions of landed cost quotes every day.

“Right now, we are the leader for APIs in cross-border e-commerce, but we need to also be the technology leader regardless of the industry,” Reid added. “We can’t just accept that we are good enough, we need to be better at doing this. We are looking at expanding into additional markets because it is more than just servicing U.S. companies, but need to be where our customers are.”

 

#aaron-skonnard, #clint-reid, #cross-border-e-commerce, #cross-border-payments, #customer-experience, #ecommerce, #enterprise, #eric-rea, #europe, #finance, #funding, #payments, #pluralsight, #podium, #pricing, #recent-funding, #saas, #silversmith-capital-partners, #startups, #tc, #todd-maclean, #zonos

Logistics startup Stord raises $90M in Kleiner Perkins-led round, becomes a unicorn and acquires another company

When Kleiner Perkins led Stord’s $12.4 million Series A in 2019, its founders were in their early 20s and so passionate about their startup that they each dropped out of their respective schools to focus on growing the business.

Fast-forward two years and Stord — an Atlanta-based company that has developed a cloud supply chain — is raising more capital in a round again led by Kleiner Perkins.

This time, Stord has raised $90 million in a Series D round of funding at a post-money valuation of $1.125 billion — more than double the $510 million that the company was valued at when raising $65 million in a Series C financing just six months ago.

In fact, today’s funding marks Stord’s third since early December of 2020, when it raised its Series B led by Peter Thiel’s Founders Fund, and brings the company’s total raised since its 2015 inception to $205 million.

Besides Kleiner Perkins, Lux Capital, D1 Capital, Palm Tree Crew, BOND, Dynamo Ventures, Founders Fund, Lineage Logistics and Susa Ventures also participated in the Series D financing. In addition, Michael Rubin, Fanatics founder and founder of GSI Commerce; Carlos Cashman, CEO of Thrasio; Max Mullen, co-founder of Instacart; and Will Gaybrick, CPO at Stripe, put money in the round.

Founders Sean Henry, 24, and Jacob Boudreau, 23, met while Henry was at Georgia Tech and Boudreau was in online classes at Arizona State (ASU) but running his own business, a software development firm, in Atlanta.

Over time, Stord has evolved into a cloud supply chain that can give companies a way to compete and grow with logistics, and provides an integrated platform “that’s available exactly when and where they need it,” Henry said. Stord combines physical logistics services such as freight, warehousing and fulfillment in that platform, which aims to provide “complete visibility, rapid optimization and elastic scale” for its users.

About two months ago, Stord announced the opening of its first fulfillment center, a 386,000-square-foot facility, in Atlanta, which features warehouse robotics and automation technologies. “It was the first time we were in a building ourselves running it end to end,” Henry said.

And today, the company is announcing it has acquired Connecticut-based Fulfillment Works, a 22-year-old company with direct-to-consumer (DTC) experience and warehouses in Nevada and in its home state.

With FulfillmentWorks, the company says it has increased its first-party warehouses, coupled with its network of over 400 warehouse partners and 15,000 carriers.

While Stord would not disclose the amount it paid for Fulfillment Works, Henry did share some of Stord’s impressive financial metrics. The company, he said, in 2020 delivered its third consecutive year of 300+% growth, and is on track to do so again in 2021. Stord also achieved more than $100 million in revenue in the first two quarters of 2021, according to Henry, and grew its headcount from 160 people last year to over 450 so far in 2021 (including about 150 Fulfillment Works employees). And since the fourth quarter is often when people do the most online shopping, Henry expects the three-month period to be Stord’s heaviest revenue quarter.

For some context, Stord’s new sales were up “7x” in the second quarter of 2020 compared to the same period last year. So far in the third quarter, sales are up almost 10x, according to Henry.

Put simply, Stord aims to give brands a way to compete with the likes of Amazon, which has set expectations of fast fulfillment and delivery. The company guarantees two-day shipping to anywhere in the country.

“The supply chain is the new competitive battleground,” Henry said. “Today’s buying expectations set by Amazon and the rise of the omni-channel shopper have placed immense pressure on companies to maintain more nimble and efficient supply chains… We want every company to have world-class, Prime-like supply chains.”

What makes Stord unique, according to Henry, is the fact that it has built what it believes to be the only end-to-end logistics network that combines the physical infrastructure with software.

That too is one of the reasons that Kleiner Perkins doubled down on its investment in the company.

Ilya Fushman, Stord board director and partner at Kleiner Perkins, said even at the time of his firm’s investment in 2019, that Henry displayed “amazing maturity and vision.”

At a high level, the firm was also just drawn to what he described as the “incredibly large market opportunity.”

“It’s trillions of dollars of products moving around with consumer expectation that these products will get to them the same day or next day, wherever they are,” Fushman told TechCrunch. “And while companies like Amazon have built amazing infrastructure to do that themselves, the rest of the world hasn’t really caught up… So there’s just amazing opportunity to build software and services to modernize this multitrillion-dollar market.”

In other words, Fushman explained, Stord is serving as a “plug and play” or “one stop shop” for retailers and merchants so they don’t have to spend resources on their own warehouses or building their own logistics platforms.

Stord launched the software part of its business in January 2020, and it grew 900% during the year, and is today one of the fastest-growing parts of its business.

“We built software to run our logistics and network of hundreds of warehouses,” Henry told TechCrunch. “But if companies want to use the same system for existing logistics, they can buy our software to get that kind of visibility.”

#atlanta, #cloud, #e-commerce, #ecommerce, #funding, #fundings-exits, #ilya-fushman, #kleiner-perkins, #logistics, #ma, #recent-funding, #startup, #startups, #stord, #supply-chain, #venture-capital

Creative ad tech is on the cusp of a revolution, and VCs should take note

2021 has been a good year to be an ad tech investor. Valuations are surging, Wall Street is happy and exits are frequent and satisfying. It’s the perfect time to double down and invest in an area that has been largely ignored but is poised for major upside in the next few years: Digital creative ad technology.

Think about it. When was the last time we saw a major ad tech funding round that was directed at the actual ads themselves — the messages people actually see everyday? I’d argue that now is the perfect time.

The adtech startups that can figure out how to adapt ads that can interact with the remote control, a synced smartphone or voice commands — maybe even make them shoppable — can theoretically produce a game-changer.

Here are five reasons why VCs should consider ratcheting up their investment into ad tech startups building the next generation of creative tools:

Creative tech is far from being saturated

Consider how much has been spent over the 15 years on digital advertising mechanics such as targeting, serving, measuring and verification. Not to mention the trillions that have gone toward helping brands keep track of customer data and interactions — the marketing clouds, DMPs and CDPs.

Yet you can count the number of creative-centric ad tech companies on one hand. This means there is a lot of room for innovation and early leaders. VideoAmp, which helps brands make ads for various social platforms, pulled in $75 million earlier this year. Given how fast platforms like TikTok and Snap are growing, it won’t be the last.

Digital ad targeting is being squeezed

Ads need to do more work today. Between regulation, cookies going away and Apple locking down data collection, we’ve seen a renewed interest in contextual advertising, including funding for the likes of GumGum, as well as identity resolution firms like InfoSum.

But the digital ad ecosystem can’t get by only using broader data-crunching techniques to replace “retargeting.” The medium is practically crying out for a creative revival that can only be sparked by scalable tech. The recent funding for creative testing startup Marpipe is a start, but more focus is needed on actual tech-driven ideation and automation.

#advertising-tech, #column, #digital-advertising, #digital-marketing, #e-commerce, #ec-column, #ec-marketing-tech, #ecommerce, #machine-learning, #startups, #targeted-advertising, #tc, #venture-capital

The network effect is anti-competitive

A U.S. federal judge last week struck down Apple rules restricting app developers from selling directly to customers outside the App Store.

Apple’s stock fell 3% on the news, which is being regarded as a win for small and midsize app developers because they’ll be able to build direct billing relationships with their customers. But Apple is just one of many Big Tech companies that dominate their sector.

The larger issue is how this development will impact Amazon, Facebook, Grubhub and other tech giants with online marketplaces that use draconian terms of service to keep their resellers subservient. The skirmish between Apple and small and midsize app developers is just a smaller battle in a much larger war.

App makers pay up to 30% on every sale they make on the Apple App Store. Resellers on Amazon pay a monthly subscription fee, a sales commission of 8% to 15%, fulfillment fees and other miscellaneous charges. Grubhub charges restaurants 15% of every order, a credit card processing fee, an order processing fee and a 10% delivery commission.

Like app developers, online resellers and social media influencers are all falling for the same big lie: that they can build a sustainable business with healthy margins on someone else’s platform. The reality is the App Store, online marketplaces and even social networks that dominate their sectors have the unilateral power to selectively deplatform and squeeze their users, and there’s not much to be done about it.

Healthy competition exists inside the App Store and among marketplace resellers and aspiring social media influencers. But no one seems to be talking about the real elephants in the room, which are the social networks and online marketplace providers themselves. In some respects, they’ve become almost like digital dictators with complete control over their territories.

It’s something every small and midsize business that gets excited about some new online service catering to their industry should be aware of because it directly impacts their ability to grow a stable business. The federal judge’s decision suggests the real goal in digital business is a direct billing relationship with the end user.

On the internet, those who are able to lead a horse to water and make them drink — outside the walled gardens of digital marketplace operators like Uber, Airbnb and Udemy — are the true contenders. In content and e-commerce, this is what most small and midsize companies don’t realize. Your own website or owned media, at a top-level domain that you control, is the only unfettered way to sell direct to end users.

Mobile app makers on Apple’s App Store, resellers on Amazon and aspiring content creators on Instagram, YouTube and TikTok are all subject to the absolute control of digital titans who are free to govern by their own rules with unchecked power.

For access to online marketplaces and social networks, we got a raw deal. We’re basically plowing their fields like digital sharecroppers. Resellers on Amazon are forced to split their harvest with a landlord who takes a gross percentage with no caps. Amassing followers on TikTok is building an audience that’s locked inside their venue.

These tech giants — all former startups that built their audiences from scratch — are free to impose and selectively enforce oppressive rules. If you’re a small fry, they can prohibit you from asking for your customer’s email address and deplatform you for skimming, but look the other way when Spotify and The New York Times do the same thing. Both were already selling direct and through the App Store prior to Friday’s ruling.

How is that competitive? Even after the ruling, Big Tech still gets to decide who they let violate their terms of service and who they deplatform. It’s not just their audience. It’s their universe, their governance, their rules and their enforcement.

In the 1948 court case United States v. Paramount Pictures, the Supreme Court ruled that film studios couldn’t own their own theaters because that meant they could exclusively control what movies were screened. They stifled competition by controlling what films made it to the marquee, so SCOTUS broke them up.

Today, social networks control what gets seen on their platforms, and with the push of a button, they can give the hook to whoever they want, whenever they want. The big challenge that the internet poses to capitalism is that the network effect is fundamentally anti-competitive. Winner-take-all markets dominated by tech giants look more like government-controlled than free-market economies.

On the one hand, the web gives us access to a global marketplace of buyers and sellers. On the other, a few major providers control the services that most people use to do business, because they don’t have the knowledge or resources to stand up a competitive website. But unless you have your own domain and good search visibility, you’re always in danger of being deplatformed and losing access to your customers or audience members with no practical recourse.

The network effect is such that once an online marketplace becomes dominant, it neutralizes the competitive market, because everyone gravitates to the dominant service to get the best deal. There’s an inherent conflict between the goals of a winner-takes-all tech company and the goals of a free market.

Dominant online marketplaces are only competitive for users. Meanwhile, marketplace providers operate with impunity. If they decide they want to use half-baked AI or offshore contractors to police their terms of service and shore up false positives, there’s no practical way for users to contest. How can Facebook possibly govern nearly 3 billion users judiciously with around 60,000 employees? As we’ve seen, it can’t.

For app makers, online resellers and creators, the only smart option is open source on the open web. Instead of relying on someone else’s audience (or software for that matter), you own your online destination powered by software like WordPress or Discord, and you never have to worry about getting squeezed when the founders go public or their platform gets bought by profit-hungry investment bankers. Only then can you protect your profit margins. And only then are the terms of service the laws of the land.

Politics aside, as former President Donald Trump’s deplatforming demonstrated, if you get kicked off Facebook and Twitter, there’s really nowhere else to go. If they want you out, it’s game over. It’s no coincidence Trump lost his Facebook and Twitter accounts on the same day the Republicans lost the Senate. If the GOP takes back the Senate, watch Trump get his social media accounts back. Social networks ward off regulators by appeasing the legislative majority.

So don’t get too excited about the new Amazon Influencer Program. If you want to build a sustainable digital business, you need an owned media presence powered by software that doesn’t rake commissions, have access to your customer contact information and has an audience that can’t be commandeered with an algorithm tweak.

#airbnb, #amazon, #apple, #apple-app-store, #apple-inc, #column, #e-commerce, #ecommerce, #facebook, #online-marketplace, #opinion, #social, #social-media, #social-networks, #tc, #tiktok, #uber

Amazon partners with AXS to install Amazon One palm readers at entertainment venues

Amazon’s biometric scanner for retail, the Amazon One palm reader, is expanding beyond the e-commerce giant’s own stores. The company announced today it has acquired its initial third-party customer with ticketing company AXS, which will implement the Amazon One system at Denver, Colorado’s Red Rocks Amphitheatre as an option for contactless entry for event-goers.

This is the first time the Amazon One system will be used outside an Amazon-owned retail store, and the first time it’s used for entry into an entertainment venue. Amazon says it expects AXS to roll out the system to more venues in the future, but didn’t offer any specifics as to which ones or when.

At Red Rocks, guests will be able to associate their AXS Mobile ID with Amazon One at dedicated stations before they enter the amphitheatre, or they can enroll at a second station once inside in order to use the reader at future AXS events. The enrollment process takes about a minute and customers can choose to enroll either one or both palms. Once set up, ticketholders can use a dedicated entry line for Amazon One users.

“We are proud to work with Amazon to continue shaping the future of ticketing through cutting-edge innovation,” said Bryan Perez, CEO of AXS, in a statement. “We are also excited to bring Amazon One to our clients and the industry at a time when there is a need for fast, convenient, and contactless ticketing solutions. At AXS, we are continually deploying new technologies to develop secure and smarter ticketing offerings that improve the fan experience before, during, and after events,” he added.

Amazon’s palm reader was first introduced amid the pandemic in September 2020, as a way for shoppers to pay at Amazon Go convenience stores using their palm. To use the system, customers would first insert their credit card then hover their palm over the device to associate their unique palm print with their payment mechanism. After setup, customers could enter the store just by holding their palm above the biometric scanner for a second or so. Amazon touted the system as a safer, “contactless” means of payment, as customers aren’t supposed to actually touch the reader. (Hopefully, that’s the case, considering the pandemic rages on.)

On the tech side, Amazon One uses computer vision technology to create the palm signatures, it said.

In the months that followed, Amazon expanded the biometric system to several more stores, including other Amazon Go convenience stores, Amazon Go Grocery stores, and its Amazon Books and Amazon 4-star stores. This April, it brought the system to select Whole Foods locations. To encourage more sign-ups, Amazon even introduced a $10 promotional credit to enroll your palm prints at its supported stores.

When palm prints are linked to Amazon accounts, the company is able to collect data from customers’ offline activity to target ads, offers, and recommendations over time. And the data remains with Amazon until a customer explicitly deletes it, or if the customer doesn’t use the feature for at least two years.

While the system offers an interesting take on contactless payments, Amazon’s track record in this area has raised privacy concerns. The company had in the past sold biometric facial recognition services to law enforcement in the U.S. Its facial recognition technology was the subject of a data privacy lawsuit. And it was found to be still storing Alexa voice data even after users deleted their audio files.

Amazon has responded by noting its palm print images are encrypted and sent to a secure area built for Amazon One in the cloud where Amazon creates the customers’ palm signatures. It also has noted it allows customers to unenroll from either a device or from its website, one.amazon.com once all transactions have been processed.

#alexa, #amazon, #amazon-music, #ceo, #computer-vision-technology, #computing, #denver, #e-reader, #ecommerce, #facial-recognition, #privacy, #retail-store, #retailers, #technology, #united-states, #whole-foods

Fintech startup SellersFunding raises $166.5M in equity, credit round to support e-commerce sellers

SellersFunding secured $166.5 million in a combination of Series A equity funding and a credit facility to continue developing its technology and payments platforms for e-commerce businesses.

Northzone led the round and was joined by Endeavor Catalyst and Fasanara. SellersFunding CEO Ricardo Pero did not disclose the funding breakdown, but did say the company previously raised two seed rounds for a total of $40 million in equity and more than $100 million in credit facilities, including one that the company was expanding to $200 million.

SellersFunding, with offices in Florida, New York and London, created a digital platform that delivers financial tools and resources to streamline global commerce for thousands of marketplaces, including working capital, cross-border cash management, tax solutions and business valuation.

Pero got the idea for the company after spending 20 years in the financial industry. He left JP Morgan in 2016 with a drive to start his own company. He was consulting for a friend selling on Amazon who asked him to help make sense of Amazon’s fees and to review the next year’s budget because the friend was struggling to keep up with growth.

“I helped him address the fees issue, but when I went to talk to traditional lenders, I found that they have no clue about e-commerce and the needs of SMEs,” he said.

In addition to being a lending source for businesses selling on these marketplaces, SellersFunding leverages sales data provided by the marketplaces and e-commerce platforms to create sales and cash flow estimates based on the credit limits given to clients so that owners can better understand the fees they are paying and make more informed decisions.

He founded the company in 2017, and today has over 30,000 registered users and is approaching $10 billion in sales volume that is feeding data into SellersFunding’s daily models. The company makes money as both a lender and on fees it charges for payments collected by its customers. Merchants can collect money from marketplaces and pay their suppliers in local or foreign currency.

SellersFunding has consistently grown 300% year over year, Pero said. As such, he intends to use the new funding to scale globally, expand the team, create a marketing budget and look for two small acquisitions in the U.S. and Europe.

The company will continue to invest on the payments side and to promote cross-border payments.

“When I look at the payments landscape, companies are competing on pricing and I don’t think we will ever have a focus there, but instead will compete on customer experience,” Pero added. “Our core business will always be lending and our core investments will be payments and technology, but then we will extend to other services that our clients want.”

With an eye on expanding internationally, it fit to bring on Northzone as a partner, he added. The venture firm is based in Europe and was of a similar vision for thinking globally.

Jeppe Zink, general partner at Northzone, said via email that Pero and his team “are the most experienced in this category” and are building a category leader that is “more experienced and understanding of the lending side than its competitors.”

“We have seen this massive rise in e-shopping, most of the new ones coming from marketplaces like Amazon and Shopify, and if you look at the sellers, thousands are small businesses sourcing their goods which means that they are very important customers,” Zink added. “Normal banks like Barclay can’t check credit. SellersFinding is helping small businesses get this credit, and rightly so. In the same way we thought neobanks won with accounts created when it comes to delivering credit and banking products, they are nowhere to be found yet.”

#banking, #ecommerce, #endeavor-catalyst, #enterprise, #fasanara, #financial-tools, #funding, #jeppe-zink, #northzone, #online-lending, #payments, #recent-funding, #retailers, #ricardo-pero, #saas, #sellersfunding, #startups, #tc

Immi takes in $3.8M to cook up plant-based instant ramen

Immi is putting a healthy spin on instant ramen by going plant-based and offering more bold tastes. The company announced Tuesday that it raised $3.8 million in seed funding.

Co-founders Kevin Lee and Kevin Chanthasiriphan both grew up in food families from Taiwan and Thailand, respectively, and met a decade ago while working at the same tech company. They bonded over getting noodles every day.

Fast-forward to today, and they both saw family members stricken with diabetes and high blood pressure and started thinking about what a better-for-you food and beverage brand would look like.

Taking the love of the Asian food they grew up with, they wanted to develop one of those brands for the U.S.

“We immediately agreed on instant ramen,” Chanthasiriphan told TechCrunch. “My dad still eats instant ramen each night, and it is such a massive market: 4 billion packets are sold per year, but it is also a product that has been dominated by the same three incumbents for years.”

The global instant noodle space is projected to be a $32 billion industry by 2027, with $7.7 billion of value in the U.S. However, the ramen most people buy in the grocery store includes noodles made of refined carbohydrates that get cooked in oil, while the soup packets are high in sodium and preservatives, he said.

Their take on it is Immi, which is plant-based, low carb and low sodium, high fiber and has 22 grams of protein on average. The product comes in three flavors — Black Garlic “Chicken,” Tom Yum “Shrimp” and Spicy “Beef.”

The pair went into the company full-time in 2019 and have spent the better part of the last few years heads down in R&D, but the finished product didn’t come easy. In fact, when speaking with people in the industry, they were told that creating a healthier version of ramen would be “kind of impossible,” Lee said. They had to start from the ground up and make it themselves, formulating the first recipes in their own kitchens.

Immi’s variety pack includes Black Garlic “Chicken,” Tom Yum “Shrimp” and Spicy “Beef.” Image Credits: Immi

The funding raise comes as Immi releases a reformulation of their product this year aimed at replicating traditional instant ramen in broth taste, mouthfeel, texture and slurpability.

Siddhi Capital led the round and was joined by Palm Tree Crew, Constellation Capital, Animal Capital, Pear Ventures, Collaborative Fund and a group of individuals, including Patrick Schwarzenegger, Kat Cole and Nik Sharma, as well as executives from Thrive Market, Caviar, Daring Foods, Madhappy, Twitch, Kettle & Fire, MUD\WTR, Native, Amity Supply, Visionary Music Group, Italic, Tatcha and Casper.

Melissa Facchina, co-founder and general partner at Siddhi Capital, said her firm invests in food and beverage brands and its investment arm is a mentor to the Immi team.

“We were blown away by them,” she said. “It costs a lot of money to innovate in this industry, and it is exciting for myself and family to have something that we can grab and go. The second version launching looks exactly like the traditional brick pack and now has adult flavors that attach to a different culinary pallet.”

The natural or better-for-you foods industry has changed “dramatically” in the last decade,  Facchina said. Most of it is driven by consumers that want transparency in the supply chain, cleaner ingredients and authentic brands.

Consumer packaged goods brands that are reinventing themselves already have successful product lines, but few brands are taking a look at certain categories she said are ripe for reinvention, like cereal. Her firm is an investor in Magic Spoon, and she sees Immi reinventing ramen and Asian cuisine, saying “the Kevins as a founder group are highly moldable, high-achieving and want to surround themselves with best-in-class people.”

Meanwhile, the new funding will be split between R&D, hiring and marketing, Lee said. The company is taking in customer feedback to enhance the flavors, and would like to optimize its supply chain, hire for key executive roles and put spending toward testing new marketing channels. Immi sells its product via its own online store, but would like to expand into wholesale channels and online grocers.

Immi’s products were launched in January and saw inventory sell out in the first month without any marketing. They have since sold over 10,000 orders across the U.S. and are even looking to go international.

Going forward, the company will be working on two initiatives: The first is to develop an infrastructure to expand its product offerings, like more flavors and noodle types, so it can launch a new flavor every few months. Lee and Chanthasiriphan also aim to develop additional Asian food products that have cleaner ingredients, like snacks and confections, that they loved eating when they were children.

The second is marketing and distribution. The company has amassed a community of 4,000 members that help Immi with rapid taste testing.

“We are figuring out how to bring our products to a more mainstream audience, especially those that may not be following a certain diet, but want to bring in food and beverages that are healthier,” Lee said. “We are also bringing in taste makers of culture, celebrities and TikTok influencers to broaden consumer interest and bring Immi into the mainstream cluster.”

 

#animal-capital, #collaborative-fund, #constellation-capital, #ecommerce, #food, #food-and-drink, #funding, #immi, #kevin-chanthasiriphan, #kevin-lee, #melissa-facchina, #noodle, #palm-tree-crew, #pear-ventures, #ramen, #recent-funding, #siddhi-capital, #startups, #tc

Egyptian startup Capiter raises $33M to expand B2B e-commerce platform across MENA

Funding startups that help manufacturers and sellers distribute products and merchants access them on a single platform keeps soaring across Africa.

Today, Cairo-based B2B e-commerce startup Capiter continues that trend by raising a $33 million Series A round.

The investment was co-led by Quona Capital and MSA Capital. Other participating investors include Savola, Shorooq Partners, Foundation Ventures, Accion Venture Lab, and Derayah Ventures.

Capiter was launched in July 2020 by Mahmoud Nouh and Ahmed Nouh. Speaking with TechCrunch, CEO Mahmoud Nouh says Capiter solves problems around reach and insights for suppliers and manufacturers.

Many of the manufacturers in Egypt today do not have the right infrastructure of the supply chain in place to reach merchants. Nouh says that manufacturers can only reach 30% of merchants in the market, but with Capiter, that number goes up between 80% to 100%.

Also, a large portion of the manufacturers’ end trade happens via traditional channels where there is basically no transparency over data or market insights.

Using machine learning, Capiter says it helps these manufacturers gain critical insights into the markets they serve, the products they sell, and how they fair with competition.

Then for merchants, Capiter attends to three problems. The first is the inconvenience merchants have to deal with engaging several suppliers to find the right product. The second is transparency which involves some back and forth between merchants and manufacturers on pricing. The third is that merchants often have little or no access to working capital to get the right product and the right time.

With Capiter, merchants can order products from FMCGs and wholesalers while the company delivers them. Capiter also provides fair pricing and matching techniques that showcases a wide range of inventory for merchants.

Then it affords working capital to them to buy more products even when they are strapped with cash. Capiter partners with local banks in Egypt and the Central Bank to perform this.

Capiter has over 12 merchant types on its platform, including mom-and-pop stores, hotels, restaurants, cafes, electronic shops, supermarkets, grocery shops, and catering companies, each with its own customized solutions.

“We’re able to get the data from the products they buy. So we offer them the best solution on what they should sell, at what time and peak seasons, including when are the offerings happening. All of these are customized solutions that we offer,” said Mahmoud Nouh.

Capiter

The Capiter app

The company’s revenues are derived from little margins on the products bought from manufacturers and sold to merchants. Then on rebates for the suppliers and commission from the working capital provided to merchants. Capiter also makes money from providing market insights and data services to manufacturers and FMCGs.

Typically B2B e-commerce platforms operate either asset-light, inventory-heavy models. Nouh tells me that Capiter chose to use a hybrid model — making deliveries without owning any trucks to ensure scalability and owning inventory, especially for high turnover products helping the company with high availability and better pricing.

“This way has enabled us to scale the business in a very fast manner and at the same time, efficiently and reliably. Regarding warehouses and trucks, we don’t own them; we rent them. We deal with third-party logistics for transportation and we manage them.”

Over 50,000 merchants and 1,000 sellers use Capiter. According to CEO Nouh, the company has provided up to 6,000 SKUs. He also adds that the company is targeting an annualized revenue of $1 billion by next year.

“We’re on a very good trajectory for achieving this,” he added. “In terms of team members, we have a team of more than 1000 people at the moment, including in warehouses, delivery, etc. So we’ve seen good traction across all board,” he answered when asked about Capiter’s traction.

Quona Capital, the co-lead investor in this round, is known to have made some B2B e-commerce bets over the past years, for instance, Kenya’s Sokowatch. The investment in Capiter adds to the firm’s portfolio in that regard and a growing presence in the MENA region being its first check made in Egypt.

In a statement, Quona co-founder and managing partner Monica Brand Engel said, “Capiter’s embedded finance model, combined with its expertise and strong user engagement, can have a dramatic impact on the financial lives of SMEs, helping them optimize their income which helps communities to thrive.”

“SME supply chain inefficiencies are massive throughout the Middle East. We believe the key blocker is the lack of working capital in the system. Capiter has built an asset-light way to aggregate retailers and suppliers and facilitate credit into the system through a comprehensive multi-product offering such as commerce, credit financing, digital payments, bookkeeping and inventory management for SMEs, leveraging on the ecosystem built by the local banks and financial institutions.” adds Ben Harburg, partner at MSA Capital, a global VC that has invested in fintechs like Nubank and Klarna.

According to Ahmed Nouh, the company’s COO, Capiter will expand into new verticals like agriculture and pharmaceutical offerings.

The co-founder brings experience from the shipping and logistics space. Both he and Mahmoud are serial entrepreneurs. The latter’s journey is quite prominent, having worked in the mobility space as the co-founder and COO of Egyptian ride-hailing company SWVL. The company recently announced a potential SPAC deal valuing it at $1.5 billion and is one of the few African startups breeding a tech mafia. Ahmed Sabbah, another co-founder of the company, now runs early-stage fintech startup Telda.

Capiter has attracted a global team that brings together the expertise from companies like Careem and Flipkart needed to achieve the company’s targets, said Mahmoud.

He adds that the team, alongside the provision of financial services via partnerships with banks and its hybrid model, is how the company stands out in a competitive market, including the likes of Fatura, Bosta, and MaxAB.

Following this investment, the company plans to expand vertically (in terms of the buyer type) and geographically within the next year.

“We want to serve every single SME in the MENA region and expanding inside Egypt and globally.” He adds that Savola Group, one of its investors and the largest investor for FMCG products in the MENA region, will prove pivotal to this growth. Capiter also plans to diversify its financial services offerings to include payments. 

#africa, #b2b-e-commerce-retail, #ecommerce, #egypt, #finance, #funding, #merchant, #middle-east, #recent-funding, #startups, #tc

Commercetools raises $140M at a $1.9B valuation as ‘headless’ commerce continues to boom

E-commerce these days is now a major part of every retailer’s strategy, so technology builders and platforms that are helping them compete better on digital screens are seeing a huge boost in business. In the latest turn, Commercetools — a provider of e-commerce APIs that larger retailers can use to build customized payment, check-out, social commerce, marketplace and other services — has closed $140 million in funding, a Series C that CEO Dirk Hoerig has confirmed to me values the company at $1.9 billion. 

The funding is being led by Accel, with previous investors Insight Partners and REWE Group also participating. Munich, Germany-based Commercetools spun out of REWE — a giant German retailer, and also a customer — and announced $145 million in investment led by Insight in October 2019.

This latest round represents a huge hike on its valuation since then, when Commercetools was valued at around $300 million.

Part of the reason for the big bump, of course, has been the wave of interest in digital transactions from shopping online. E-commerce was already growing at a steady pace before 2020, by some estimates representing more than half of all commerce transactions. The Covid-19 pandemic turbo-charged that proportion, with many retailers switching exclusively to internet sales, and consumers stuck at home happy to shop with a click.

While companies like Shopify have addressed the needs of smaller retailers, providing them with an alternative or complement to listing on third-party marketplaces like Amazon’s, Commercetools has built its business around catering to larger retailers and the many specific, large-scale needs and investment budgets that they may have for building their digital commerce solutions.

It provides some 300 APIs today around some nine “buckets” of services, and a wide network of integration partners, Hoerig said, and powers some $10 billion of sales annually for its customers, which include the likes of Audi, AT&T, Danone, Tiffany & Co., John Lewis and many others.

“Our main focus is the retailer with more than $100 million in gross merchandise value,” Hoerig said. “This is when it becomes interesting.” But he added that the force of market growth is such that Commercetools is also seeing a lot of business from smaller companies that are simply needing more functionality to address their fast growth. “So we also sometimes have customers that start at $5 million in GMV and quickly go to $50 million. With that scale, they also have specific requirements, so the lines get a bit blurry.” (And that also explains why investors are so interested: there is a lot of evidence of the market growing and growing; and by capturing smaller retailers on big trajectories, that represents a lot more scale for Commercetools.)

Hoerig is sometimes credited with being the person who first coined the term “headless commerce”, which basically means APIs that can be used by a company, or its team of strategists, developers and designers, to build their own customized check-out and other purchasing experiences, rather than fitting these into templates provided by the tech company powering the checkout.

But as the API economy has continued to grow, and the world of non-tech companies that use tech continues to mature, that has taking on a mass-market appeal, and so Commercetools is far from being the only one in this area. In addition to Shopify (which has its own version targeting larger businesses, Shopify Plus), others include SprykerSwellFabricChord and Shogun.

Commercetools will be using the funding both to continue organically expanding its business, but also to make some acquisitions to bolt on new customers, and new technology, tapping into some of the scaling and consolidation that is taking place across e-commerce as a whole. What will be interesting to see is where consolidation will happen, and which startups will be raising money to scale on their own: right now there is a lot of enthusiasm around the space because it is so buoyant, and that will spell more money being funneled to more startups.

Case in point: when I first got wind of this funding round, Commercetools told me it was in the middle of a deal to acquire a company. In the end, that company decided to stay independent and take some more investment to try to grow on its own. Hoerig said it’s now pursuing another target.

Indeed, that is also the bigger force that has brought Commercetools to where it is today.

“The chance to invest in a fast-growing, innovative commerce platform was one we could not pass up,” said Ping Li, the partner at Accel who led on this deal, said in a statement. “Commercetools provides e-commerce enterprises the technology necessary to capture revenue in the rapidly growing global e-commerce market.”

#accel, #api, #articles, #att, #audi, #business, #ceo, #commercetools, #content-management-systems, #danone, #e-commerce, #ecommerce, #economy, #europe, #germany, #headless-commerce, #insight-partners, #munich, #ping-li, #shopify, #social-commerce

With sales momentum, Bookshop.org looks to future in its fight with Amazon

If Gutenberg were alive today, he’d be a very busy angel investor.

With book sales booming during the COVID-19 lockdowns last year, the humble written word has suddenly drawn the limelight from VCs and founders. We’ve seen a whole cavalcade of new products and fundings, including algorithmic recommendation engine BingeBooks, book club startups like Literati and the aptly named BookClub, as well as streaming service Litnerd. There have also been exits and potential exits for Glose, LitCharts and Epic.

But the one company that has captured the imagination of a lot of readers has been Bookshop.org, which has become the go-to platform for independent local bookstores to build an online storefront and compete with Amazon’s juggernaut. The company, which debuted just as the COVID-19 pandemic was spreading in January 2020, rapidly garnered headlines and profiles of its founder Andy Hunter, an industrious publisher with a deep love for the reading ecosystem.

After a year and a half, how is it all holding up? The good news for the company is that even as customers are returning to retail including bookstores, Bookshop hasn’t seen a downturn. Hunter said that August sales this year were 10% higher than July’s, and that the company is on track to do about as many sales in 2021 as in 2020. He contextualized those figures by pointing out that in May, bookstore sales increased 130% year over year. “That means our sales are additive,” he said.

Bookshop now hosts 1,100 stores on its platform, and it has more than 30,000 affiliates who curate book recommendations. Those lists have become central to Bookshop’s offering. “You get all these recommendation lists from not just bookstores, but also literary magazines, literary organizations, book lovers, and librarians,” Hunter said.

Bookshop, which is a public-benefit corporation, earns money as all ecommerce businesses do, by moving inventory. But what differentiates it is that it’s fairly liberal in paying money to affiliates and to bookstores who join its Platform Seller program. Affiliates are paid 10% for a sale, while bookstores themselves take 30% of the cover price of sales they generate through the platform. In addition, 10% of affiliate and direct sales on Bookshop are placed in a profit-sharing pool which is then shared with member bookstores. According to its website, Bookshop has disbursed $15.8 million to bookstores since launch.

The company has had a lot of developments in its first year and a half of business, but what happens next? For Hunter, the key is to build a product that continues to engage both customers and bookstores in as simple a manner as possible. “Keep the Occam’s razor,” he says of his product philosophy. For every feature, “it’s going to add to the experience and not confuse a customer.”

That’s easier said than done, of course. “For me, the challenge now is to create a platform that is extremely compelling to customers, that does everything that booksellers want us to do, and to create the best online book buying and book selling experience,” Hunter said. What that often means in practice is keeping the product feeling “human” (like shopping in a bookstore) while also helping booksellers maximize their advantages online.

Bookshop.org CEO and founder Andy Hunter. Image Credits: Idris Solomon.

For instance, Hunter said the company has been working hard with bookstores to optimize their recommendation lists for search engine discovery. SEO isn’t exactly a skill you learn in the traditional retail industry, but it’s crucial online to stay competitive. “We now have stores that rank number one in Google for book recommendations from their book lists,” he said. “Whereas two years ago, all those links would have been Amazon links.” He noted that the company is also layering in best practices around email marketing, customer communications, and optimizing conversion rates onto its platform.

Bookshop.org offers tens of thousands of lists, which provide a more “human” approach to finding books than algorithmic recommendations.

For customers, a huge emphasis for Bookshop going forward is eschewing the algorithmic recommendation model popular among top Silicon Valley companies in lieu of a far more human-curated experience. With tens of thousands of affiliates, “it does feel like a buzzing hive of … institutions and retailers who make up the diverse ecosystem around books,” Hunter said. “They all have their own personalities [and we want to] let those personalities show through.”

There’s a lot to do, but that doesn’t mean dark clouds aren’t menacing on the horizon.

Amazon, of course, is the biggest challenge for the company. Hunter noted that the company’s Kindle devices are extremely popular, and that gives the ecommerce giant an even stronger lock-in that it can’t attain with physical sales. “Because of DRM and publisher agreements, it’s really hard to sell an ebook and allow someone to read it on Kindle,” he said, likening the nexus to Microsoft bundling Internet Explorer on Windows. “There is going to have to be a court case.” It’s true that people love their Kindles, but even “if you love Amazon… then you have to acknowledge that it is not healthy.”

I asked about whether he was worried about the number of startups getting funded in the books space, and whether that funding could potentially crowd out Bookshop. “The book club startups — they are going to succeed by putting books — and conversations about books — in front of the largest audience,” Hunter believes. “So that is going to make everyone succeed.” He is concerned though with the focus on “disruption” and says that “I do hope they succeed in a way that partners with independent bookstores and members of the community that exist.”

Ultimately, Hunter’s strategic concern isn’t directed to competitors or even the question of whether the book is dead (it’s not), but a more specific challenge: that today’s publishing ecosystem ensures that only the top handful of books succeed. Often dubbed “the midlist

problem,” Hunter is worried about the increasingly blockbuster nature of books these days. “One book will suck up most of the oxygen and most of the conversation or the top 20 books [while] great innovative works from young authors or diverse voices don’t get the attention they deserve,” he said. Bookshop is hoping that human curation through its lists can help to sustain a more vibrant book ecosystem than recommendation algorithms, which constantly push readers to the biggest winners.

As Bookshop heads into its third year of operations, Hunter just wants to keep the focus on humans and bringing the rich experience of browsing in a store to the online world. Ultimately, it’s about intentionality. “I really want people to understand that we are creating the future we live in with all of these small decisions about where we shop and how we shop and we should remain very conscious about how we deliberate about those,” he said. “I want Bookshop to be fun to shop at and not just a place to do your civil duty.”

#amazon, #bingebooks, #bookclub, #books, #ecommerce, #epic, #glose, #litcharts, #literati, #startups

MaxRewards banks $3M to reveal best payment methods that reap the most rewards

When Anik Khan graduated from college, his first job was working on credit cards and business expenses at Accenture. There, he found that someone could bring in a couple of thousand dollars just by having the right credit cards and following the rewards and promotions.

It was back in 2017 when he and David Gao got the idea for his company MaxRewards, a digital wallet app that manages credit cards and automatically activates benefits like rewards, cashback offers and monthly credits. It also makes recommendations at the point of purchase on which card would yield the best reward for that purchase.

Going after the some 83% of Americans that have a credit card, the app version was officially launched in 2019, and now the Atlanta-based company is announcing a $3 million seed round co-led by Dundee Venture Capital and Calano Ventures. Also backing the company are Techstars, Fintech Ventures Fund, Service Provider Capital and Fleetcor president Nick Izquierdo.

Tracking his own credit cards manually prior to MaxRewards, Khan recalled in one year, getting $16,000 in rewards. However, utilizing those benefits was time-consuming and difficult, because the rewards and savings aren’t always made evident by the credit card companies.

“Other companies have tried to do something similar, but the issue is you don’t have the reward information or the offers,” Khan told TechCrunch. “If you were to aggregate this information, you still would have to activate all of these things and use them before they expired.”

Users connect their accounts and when they make a purchase, their location is cross-referenced with the merchant and an algorithm is applied to tell the user which card to use. The average app user has six credit cards.

MaxRewards is free to download and use, and the majority of the app’s functionalities are free. Users who want additional features, like the auto activation or rewards, can join MaxRewards Gold and are given the opportunity to choose their own monthly price — the average is over $25 per month — based on the value they expect to gain, Khan said.

MaxRewards offers and benefits. Image Credits: MaxRewards

Ron Watson, partner at Dundee, said his firm invests in seed-stage companies between the coasts and is interested in consumer and e-commerce companies. Watson said he was impressed with what MaxRewards has been able to do with a team of three. He also relates to the company’s mission, having grown up in a lower, middle-class family that did not frequently go on vacations.

When he got his first job and was suddenly flying everywhere, he recalls building up so many rewards to the point where he was able to go on a vacation to Hawaii and only spend maybe $100, he said.

“I used to put my points into a spreadsheet, but as I got older and had kids, I realized how hard it was for the average person to do that and how important it is to have automation,” Watson said. “I downloaded the app, and on the first day, saved $20.”

The company is often compared to NerdWallet or Mint, but in terms of functionality, Khan said he feels MaxRewards is unique due to its credit card system connectors. Rather than rely on third-party aggregators to discover the rewards, MaxRewards leverages its own proprietary connectors to card systems.

There are hundreds of thousands of offers to be discovered, and consumers are asking for even more features, so Khan decided it was time to go after seed funding. He had raised a small seed, about $200,000, from his time at Techstars, but the new funding will enable him to add to his team of three people. He expects to be at 20 by the end of the year. Khan also wants to accelerate its user acquisition, product improvement and compliance.

Next up, the company is going to automate rewards and savings across additional platforms like debit cards, payment apps and cashback apps, as well as create browser extensions and a web app. Khan also wants to do more on the education side with regard to using credit cards in a smart manner.

Arron Solano, managing partner at Calano, met Khan through Techstars and said he is an advocate for using credit cards in the right way. His firm was looking for a company like MaxRewards.

“During our first call, I remember telling my partner that Anik was a bulldog who knew what he was talking about, especially at that stage,” Solano added. “He had strong team members, his vision lined up well and that checked off a massive box for us. He energized us and showed he could find a market with insanely high ‘super users.’ ”

#anik-khan, #apps, #arron-solano, #calano-ventures, #credit-cards, #david-gao, #debit-card, #dundee-venture-capital, #ecommerce, #financial-services, #fintech-ventures-fund, #funding, #loyalty-program, #maxrewards, #mobile, #nick-izquierdo, #payments, #recent-funding, #ron-watson, #service-provider-capital, #startups, #tc, #techstars, #web-app

Nigerian one-click checkout platform OurPass raises $1M pre-seed, wants to build ‘Fast for Africa’

We like to buy things online ranging from e-commerce stores to subscription-based sites. However, no one enjoys the hassle when you have to always re-log into different sites and stores. I mean, shopping can be a whole lot more fun if a fast logging and checkout system existed across all your favorite online stores.

In the U.S., high-flying startup Fast already caters to this need. Although the company is building a global product, it is limited in Africa, and OurPass has taken an interest to build one for the market.

The Abuja-based startup, which describes itself as the “Fast for Africa”, has also closed a $1 million pre-seed round to scale across the country. The round was led by Tekedia Capital and angel investors from Fortune 500 companies, the company said. 

E-commerce checkout problem is one founder and CEO Samuel Eze is familiar with, but through a second-hand experience.

“I watched my mother struggle to shop online where I saw her set up multiple accounts on different platforms while going through a rigorous checkout process,” he told TechCrunch in an interview. “In many cases, she ended up dropping the card and moving on to a different online store. Seeing the same pattern happen with other friends and family, I had to dive into it and found that it was actually a major headache for consumers and online retailers.”

Nigeria’s e-commerce market is still heavily reliant on cash on delivery. In fact, as of 2019, 70% of Nigerians in a survey said they prefer cash on delivery options to making online payments.

But the narrative is slowly changing with the likes of Paystack and Flutterwave, making it easier for merchants to collect online payments.

Per Statista, 27% of online payments made on e-commerce sites are now carried out with cards, topping cash and bank transfers as the most common payment method.

Yet checkout still remains a major issue for merchants. Yearly, about 75% of shopping carts are abandoned due to how cumbersome the checkout experience can be with long forms and re-log ins.

Attempting to tackle this challenge, OurPass provides a mobile application that enables consumers to shop with one click. The first time consumers sign up on the OurPass platform, they enter their names, email and shipping addresses. OurPass then creates an identity for each customer, which is passed across every online store they shop.

“We built an identity layer across the web to enable consumer identity to be sent across to every single online store they go to check out from,” said Eze.

In essence, OurPass customers would not need to fill out any form anymore and do not have to deal with re-logging issues. But here’s the thing: they can only shop with merchants that have OurPass API linked to their platforms. And that’s a big ask. 

So why has OurPass decided to go this route of creating its own ecosystem of merchants and consumers? For instance, in Fast’s case, only the merchants need to install Fast Checkout, while users can access the service via an e-commerce or merchant’s website. But for OurPass, users need to download an application and shop with merchants using the platform.

Initially, OurPass allowed users to fill in their payment card details when completing their forms for the first time without the need to download an application. But after several instances of payment gateways flagging many cards used by OurPass consumers and failed card transactions, the company chose to adopt a wallet strategy and created an application for consumers.

“We did not want to defeat our USP of one-click checkout by allowing consumers to try to check out in one-click only for them to see their cards flagged as fraudulent,” Eze said. “Hence the reason why we had to build our system on a wallet system to enable that one-click checkout.”

That means consumers and merchants are assigned virtual account numbers to be used in a wallet. For consumers to check out from a store, they’ll need to fund their wallets, and once they check out, the money moves into the merchants’ wallets. Eze says this helps OurPass capture value end to end and offers instant settlement of payments which, according to him, was not the case with payment gateways.

OurPass has gathered a few merchants on its platform. Most of its clients are small businesses that use Storemia, an online storefront provider OurPass acquired recently. The company also plans to work with merchants on e-commerce platforms, including WooCommerce, Magento, Squarespace and Shopify in the future and social commerce platforms like WhatsApp, Facebook and Instagram.

Alongside its one-click checkout, OurPass also offers free delivery on all orders for customers. The company partnered with logistics companies like MAX.ng and Gokada to execute on this front.

The one-year-old company charges 0.8% per transaction, capped at N1,000 (~$20) for merchants and a commission of 5% on every product sold — Eze also hints at a plan for the company to introduce subscriptions.

Since beta launching in May this year, OurPass claims to have done $500,000 in transaction value and hopes continuous growth will see it become the go-to platform for consumer checkout in Nigeria by 2023.

Per use of funds, Eze says OurPass will develop its technology and grow its team to up to 200 people before the end of next year.

#ecommerce, #ourpass, #recent-funding, #startups, #tc

CookUnity whips up nationwide expansion following $47M round

Chef-prepared, small-batch meal delivery startup CookUnity is undergoing a major expansion after closing a $47 million Series B round.

Insight Partners led the round and was joined by Endeavor Capital and current investors IDCV, Fuel Ventures and Gaingels. The latest funding comes eight months after New York-based CookUnity closed a $15.5 million Series A round led by Fuel Venture Capital. The company has now raised a total of $70 million since its inception in 2018.

Mateo Marietti, founder and CEO of CookUnity, had the idea for the subscription-based company five years ago. Marietti, who is from Argentina, was working in food tech and saw that modern delivery services were only able to offer limited food options and pricing, and was a trade-off between convenience and variety.

He went looking for a similar experience to apps like Spotify, where the music selection was limitless, and created CookUnity to connect creators of food with the people who would be eating it.

CookUnity combines the ready-to-eat meal category with a chef-focused business model that provides restaurant-quality meals at home. The rotating menu features hundreds of dishes, starting at $10.49 per meal, with an option of a subscription plan for four, six, eight, 12 or 16 meals per week. Meals heat up in minutes and also include both fast-cooking instructions, like in a microwave, or how the chef might prepare it at home, like with an additional squeeze of lemon or other toppings.

CookUnity founder Mateo Marietti. Image Credits: CookUnity

Chefs are also given tools and resources to create a digital-first business, and Marietti told TechCrunch that top-selling chefs bring in upwards of $1 million a year.

“We are building the infrastructure, working with farmers, providing the ingredients and the tech layer for both the consumer app and the chef app,” he added. “We don’t employ any talent or cook the food, but we give chefs the tools to start recruiting cooks, gather information on new recipes, organize their team and expand into new markets while also seeing their sales for the day or week.”

The company’s platform is already working with notable chefs like Jean-Georges Vongerichten, Marc Forgione and Esther Choi, and the Series B funding will enable it to add more chefs, including local rising stars and established restaurateurs, enabling them to sell beyond the typical on-demand food delivery zone, Marietti said.

Starting with the flagship kitchen in Brooklyn, CookUnity initially expanded to San Francisco, Dallas-Fort Worth, Boston and Washington, D.C. Following the Series A, the company opened kitchens in Los Angeles, Austin and Chicago. The new funding will now enable the company to accelerate its nationwide expansion with new kitchens in Atlanta and Miami by the end of the year. When all of the new kitchens are online, Marietti estimates that CookUnity will be able to serve 88% of the U.S. population.

In the last 12 months, CookUnity saw over 550% growth and to date has over 50 chefs on its roster, with plans to increase to 150 across all of its kitchens by mid-2022.

As part of the investment, Rebecca Liu-Doyle, principal at Insight Partners, is joining the CookUnity board of directors. Insight’s model is to track companies for a long time before investing; in CookUnity’s case, Liu-Doyle was watching them for more than two years. She said the timing was right for Insight to invest.

In addition to product-market fit, strong chef retention and liking the company’s focus on the food market, which is a “massive total addressable market,” she said, CookUnity was on its way to building a big business with subscription-based revenue as it took on the complexities of the back-end business for chefs.

The value proposition is unique for both of the stakeholders — on the chef side there is a creator economy tailwind, which is taking the friction out of scaling a business while also enabling chefs to build a business with a larger footprint than they just selling food around their restaurants. On the consumer side, Liu-Doyle said CookUnity is providing affordable and convenient food without having to compromise on taste and quality.

“Very few companies can offer that: it is democratization on both fronts,” she added. “In order to execute on the vision, you need a specific team, which Mateo has, and show incremental improvement to the experience. It doesn’t just happen overnight. You have to be patient and deliberate in the way you improve the experience.”

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