e-commerce
Auto Added by WPeMatico
Auto Added by WPeMatico
The number of startups acquiring e-commerce businesses, especially those operating on Amazon, to grow and scale is increasing as more people than ever are shopping online.
The latest such startup to raise capital is Forum Brands, which today announced it has raised $27 million in equity funding for its technology-driven e-commerce acquisition platform.
Norwest Venture Partners led the round, which also included participation from existing backers NFX and Concrete Rose.
Brenton Howland, Ruben Amar and Alex Kopco founded New York-based Forum Brands last summer during the height of the COVID-19 pandemic. Its self-proclaimed goal was to use data to innovate through acquisition.
“We’re buying what we think are A+ high-growth e-commerce businesses that sell predominantly on Amazon and are looking to build a portfolio of standalone businesses that are category leaders, on and off Amazon,” Howland said. “A source of inspiration for us is that we saw how consumer goods and services changed fundamentally for what we think is going to be for decades and decades to come, accelerating the shift toward digital.”
Forum Brands founding team. Image Credits: Forum Brands
Forum’s technology employs “advanced” algorithms and over 60 million data points to populate brand information into a central platform in real time, instantly scoring brands and generating accurate financial metrics.
The M&A team also uses data to contact brand owners “in just three clicks.” But Forum says it already knows which brands meet its acquisition criteria before ever making contact with brand owners.
“The decision to acquire comes within 48 hours and once terms are agreed upon, entrepreneurs get paid in 30 days or less for their brand, with additional income benefits through post-acquisition partnerships,” according to the company.
Its apps leverage analytics to push recommendations to drive growth and financial performance for brands. Then, its multichannel approaches aimed at positioning the brands for “long-term category leadership.”
“We are using a lot of data science and machine learning techniques to build technology that allows us to eventually operate efficiently a large portfolio of digital brands at scale,” Kopco said.
The company is undeterred by the increasingly crowded space based on the belief that the market opportunity is so huge, there’s plenty of room for multiple players.
“We are very much in the day zero consolidation of the e-commerce space, and the market is very, very large,” Amar told TechCrunch. “And based on our data, 98% or 99% of all sellers are still operating independently. So, this is not a winner-takes-all market. There will be multiple winners, and we’ve built a strategy to be one of these winners.”
Norwest Venture Partners’ Stew Campbell believes that the number of sellers who reach a point where they have trouble scaling either due to the lack of resources or time is only going to grow. And Forum Brands intends to capitalize on that.
“There’s a continued need for more liquidity options for the entrepreneurs behind many Amazon-first brands. Forum helps entrepreneurs recognize value, which can be significant too many,” he said. ”After acquisition, the Forum team drives operational efficiencies and scale to create better customer experiences for shoppers on Amazon.”
Campbell emphasizes that his firm was drawn to Forum Brands’ team, which the company also touts as a differentiator.
Co-founder and COO Kopco worked in a variety of product roles for several years at Amazon and Jon Derkits, Forum’s VP of brand growth, is also ex-Amazon. Overall, three-fourths of its operating team are former Amazonians. Co-CEO and co-founder Howland was an investor for two years at Cove Hill Partners and is a former McKinsey consultant. Prior to founding Forum, Co-CEO and co-founder Amar was a growth equity investor at TA Associates.
Campbell says his firm has seen many other models in this market, “but the Forum team blends long-term mindsets and focus on technology, while bringing operational and M&A expertise.”
If this all sounds familiar, it’s because TechCrunch also recently covered the raise of Acquco, which has a similar business model to that of Forum Brands and also involves former Amazon employees. In May, that startup raised $160 million in debt and equity to scale its business. Thrasio is another high-profile player in the space, and has raised $850 million in funding this year. Other startups that have recently attracted venture capital include Branded, which recently launched its own roll-up business on $150 million in funding, as well as Berlin Brands Group, SellerX, Heyday, Heroes and Perch. And, Valoreo, a Mexico City-based acquirer of e-commerce businesses, raised $50 million of equity and debt financing in a seed funding round announced in February.
Also, earlier this month, Moonshot Brands announced a $160 million debt and equity raise to “acquire high-performing Amazon third-party sellers and direct-to-consumer businesses on Shopify and WooCommerce with established brand equity.” That company says that since its founding in 2020, it has achieved a $30 million revenue run rate. Among its investors are Y Combinator, Joe Montana’s Liquid 2 Ventures and the founders of Hippo, Lambda School and Shift.
Powered by WPeMatico
Shopify changed the e-commerce landscape by making it easier for merchants to set up their websites both quickly and affordably. A startup called Tapcart is now doing the same for mobile commerce.
The company, which has referred to itself as the “Shopify for mobile apps,” today powers the shopping apps for top brands, including Fashion Nova, Pier One Imports, The Hundreds, Patta, Culture Kings, and thousands more. Following a year of 3x revenue growth, in part driven by the pandemic, Tapcart is today announcing the close of a $50 million round of Series B funding, led by Left Lane Capital. Having clearly taken notice of Tapcart’s traction with its own merchant base, Shopify is among the round’s participants.
Other investors in the round include SignalFire, Greycroft, Act One Ventures and Amplify LA.
Tapcart’s co-founders, Sina Mobasser and Eric Netsch, have worked in the mobile app industry for years. Mobasser’s previous company, TestMax, offered one of the first test prep courses on iOS, while Netsch had more recently worked on the agency side to create mobile and digital experiences for brands. Together, the two realized the potential in helping online merchants bring their businesses to mobile, as easily as they were able to go online with Shopify.
Tapcart’s founders Sina Mobasser and Eric Netsch at their Santa Monica HQ. Image Credits: Tapcart
“Now, you can launch an app on our platform in a matter of weeks, where historically it would take up to a year if you wanted to custom build an app,” explains Mobasser. “And you can do it for a low monthly fee.”
Tapcart’s platform itself offers a simple drag-and-drop builder that allows anyone to create a mobile app for their existing Shopify store using tools to design their layout, customize the product detail pages, integrate checkout options, include product reviews, and even optionally add other branded content, like blogs, lookbooks, videos (including live video) and more. Everything is synced directly from Shopify to the app in real-time, so the merchant’s inventory, products and collections are all kept up-to-date. That’s a big differentiator from some rivals, which require duplicate sets of data and data transformation.
Tapcart, meanwhile, leverages all of Shopify’s APIs and SDKs to create a native application that works with Shopify’s existing data structures.
Image Credits: Tapcart
This tight integration with Shopify helps Tapcart because it doesn’t have to focus on the e-commerce infrastructure, as the way things are structured around inventory and collections are roughly 90% the same across brands. Instead, Tapcart focuses on the 10% that makes brands stand out from one another, which includes things like branding, content and design. Its CMS allows merchants to create exclusive content, change the colors and fonts, add videos and more to make the app look and feel fully customized.
Beyond the mobile app creation aspect to its business, Tapcart also helps merchants automate their marketing. Through the Tapcart platform, merchants can communicate with their customers in real-time using push notifications that can alert them to new sales, to encourage them to return to abandoned carts, or any other promotions. The marketing campaigns can be automated, as well, which helps merchants schedule their upcoming launches and product drops ahead of time. The company claims these push notifications deliver click-through rates that are 72% higher than a traditional email or SMS text because of their interactivity and branding.
Image Credits: Tapcart
The platform has quickly found traction with SMB to mid-market enterprise customers who have reached the stage of their business where it makes sense for them to double down on customer retention and conversion and optimize their mobile workflow.
“Our sweet spot is when you have maybe a couple hundred customers in your database,” notes Netsch. “That’s a perfect time to now focus less on the paid acquisition portion of your business and more on how to retain and engage those existing customers, [so they’ll] shop more and have a better experience,” he says.
During the past 12 months, over $1.2 billion in merchant sales have flowed through Tapcart’s platform. And in 2020, Tapcart’s recurring revenue increased by 3x, as mobile apps grew even faster during the pandemic, which had increased consumer mobile screen time by 20% year-over-year from 2019. Mobile commerce spending also grew 55% year-over-year, topping $53 billion globally during the holiday shopping season, the company says. Tapcart’s own merchants saw mobile app orders at a rate of more than once-per-second during this time, and it believes these trends will continue even as the pandemic comes to an end.
Today, Tapcart generates revenue by charging a flat SaaS (software-as-a-service) fee, which differentiates it from a number of competitors who charge a percent of the merchant’s total sales.
Image Credits: Tapcart
With the additional funding, Tapcart plans to focus on its goal of becoming a vertically integrated mobile commerce suite of tools, which more recently includes support for iOS App Clips. It will also soon release an upgraded version of its insights analytics platform and will offer scripts that merchants can install on their mobile websites to compare what works on the site versus what works in the app.
Later this year, Tapcart plans to launch a full marketing automation product that will allow brands to automate and personalize their notifications even further. And it plans to invest in market expansions to make its product better designed for mobile, global commerce.
The funding will allow Santa Monica-based Tapcart to hire another 200 people over the next 24 months, up from the 70 it has currently. These will include new additions across time zones and even in markets like Australia and Europe as it moves toward global expansion.
Shopify’s investment will open up a number of new opportunities as well, including on product, engineering, business strategy and partnerships. It will also help to get Tapcart in front of Shopify’s 1.7 million global merchants.
“There’s still quite a lot of merchants that need better mobile experiences, but have yet to really double down on the mobile effort and get something like a native app,” notes Netsch. “There’s a lot of different ways and methods that merchants are experimenting with mobile growth, and we’re trying to offer all of the best parts of that in a single platform. So there’s tons of expansion for Tapcart to do just that with the existing target addressable market,” he says.
“We believe brands must be where their customers are, and today that means being on their phones,” said Satish Kanwar, VP of product acceleration at Shopify, in a statement. “Tapcart helps merchants create mobile-first shopping experiences that customers love, reinforcing Shopify’s mission to make commerce better for everyone. We look forward to seeing Tapcart expand its success on Shopify with the more than 1.7 million merchants on our platform today.”
Powered by WPeMatico
What do all companies, regardless of industry, say they want? Growth. Lighting-fast, continuous growth. The good news is you can quickly learn which growth marketing strategies work by studying other companies’ success and adapting it to your own business.
Most technophiles remember Dropbox’s referral program — the one that helped it grow 3,900% in 15 months. Its philosophy was simple: reward customers with free storage space for referring other customers. In 2008, it was an absolute revelation. A golden ticket.
Tell a story with your business’ proprietary data. You’re the only one with this information, and that makes it valuable.
In 2021, you’d be hard-pressed to find a company without a formal referral program. It’s a standard growth marketing trick. If you study other companies’ tactics, you’re going to be able to shortcut growth — it’s as simple as that.
The race to grow faster is more pressing than ever before. When you consider the speed with which venture capital funds need to return dollars to their investors and that consumer acquisition costs have increased by 55% over the last three years, forward-thinking entrepreneurs and growth marketers simply must make time to study their competition, learn best practices and apply them to their own business growth.
Of course, you should still run your own experiments, but it’s just more capital-efficient to emulate than to trial-and-error from scratch. Here are five companies with growth strategies worth emulating — including the most important lessons you can begin applying to your business today.
Have you worked with an individual or agency who helped you find and keep more users?
Help us identify the best startup growth marketing experts!
SEO is going to spend this summer shaking in its boots. Google began rolling out a two-week core algorithm update on June 2, and it’s unleashing a page experience update through August. These updates usually come with significant volatility that makes organic Google rankings jump all over the place.
However, one clear winner of the 2021 SEO footrace is Flo, a women’s ovulation calendar, period tracker and pregnancy app. According to GrowthBar, a SEO tool I co-founded, Flo’s organic traffic has soared 192% over the past two months and it ranks on page one for some staggeringly competitive women’s health keywords.
If SEO is a strategy you’re pursuing, there are two key growth lessons to take away from Flo’s recent success.
1. Authority matters now more than ever. Healthcare websites fall into a category of sensitive sites that Google classifies as Your Money, Your Life (YMYL). Because of oodles of fake news and suspect web content, Google has rightfully raised its bar for expertise and factuality. Go to any one of Flo’s more than 1,000 blog posts (yes, content is still king) and you’ll see that nearly all of them are reviewed by gynecologists, primary care physicians or some other type of women’s health expert. Its site also has pages devoted to its writers and medical reviewers, content guidelines and peer-review specifications. Flo takes its information seriously. From the 2020 election to QAnon to vaccination side effects, Google is on high alert. Whatever your niche, you need to establish credibility to win Google searches.
Powered by WPeMatico
Growth leaders used to build key relationships across a company while working together in a real-life office. Those relationships could carry over through the pandemic, but let’s say you’re a new company and you’re remote-first.
How do you build this complex collaboration from scratch?
Growth marketer and investor Susan Su tells us that the solution is not just more software tools. In the interview below, she says that after the pandemic, startup founders will need to develop a mentality that places growth at the center of company strategy.
Consultants and agencies can be great additions to this effort, especially if they have previously solved the types of problems you face. (In fact, TechCrunch is asking founders who have worked with growth marketers to share a recommendation in this survey. We’ll use your answers to find more experts to interview.)
Su is currently the head of portfolio strategy for Sound Ventures, previously a growth leader at Stripe and the first hire at Reforge. She also shared a few thoughts on market opportunities after the pandemic in the full interview below. E-commerce is mainstream for good, she says, even as we all try to step away from screens more often. However, many social and mobile sectors are mature, and it’s going to be even harder for startups to compete as real-world activities absorb more time.
Don’t forget: Susan Su will also appear at our Early Stage virtual event on July 8 (and answer questions directly).
How are you seeing startups manage changes in user engagement as more people exit pandemic lockdowns and adjust their daily lives?
As we exit the pandemic, I expect that we’ll see a natural and obvious spike in some consumer activity that will roll up to midsized businesses and enterprises. Just like with the onset of the pandemic, we’ll see uneven results across sectors:
E-commerce boomed during the pandemic but was really an augmentation of an already-accelerating trend toward digital commerce and streamlined logistics. I don’t think we backtrack from e-commerce because habit formation around online shopping has been building for years; we would be backtracking to an age long before 2020, and that’s not going to happen.
New social-mobile experiences also boomed during the pandemic, but there’s still a valid question around whether 15 months or so is enough time to become part of the ingrained infrastructure of daily life. We are living in an age of mature platforms, so every new service is stealing time away from an existing service. As with pre-pandemic growth, their success rests upon fast-accumulating network effects and great, sticky core product experience. Now that we have parks, friends and dinners out calling to us again, it’s a real test of how compelling some of these new value propositions really are, and whether they can continue to demonstrate their relevance in a more hybridized online-offline world.
That said, the pandemic was an enormous constraint on human society and [the] economy, and these kinds of constraints often breed innovation that doesn’t go away. We will evolve, but we can never go back. It sounds cheesy but it’s true.
Some aspects of the pandemic, like remote work, appear to have radically changed certain industries. How will these societal changes impact how the typical startup thinks about growth?
Growth will always be growth — that is, a process of iterative experimentation to identify and solve customer problems, and then scale those solutions in order to reach and convert bigger and bigger audiences. Platform changes like iOS 14 or Facebook’s periodic algorithm adjustments will have a bigger impact in the near term on the technical functioning of growth, and these aren’t specifically pandemic-related.
One area to watch is how growth teams are built and operated. Growth is a horizontal function that touches many different parts of the org, including product, engineering, marketing, comms and design. Many startup teams have already been working with collaboration tools even while they sat in the same office, but growth is about more than just using tools. The most effective growth leaders succeed by building relationships across the organization; it’s like the fable of Stone Soup — you’re creating this meal that will feed everyone, but you also need each person to bring a pinch of salt, or a dash of pepper, or one carrot, and that requires socialization and relationship-building. I’ll be very interested to see how new growth leaders onboard remote-only teams and what approaches they take to this “networking” need within the function.
From the days of growth hacking on social platforms, growth marketing is now an established part of the world. But it’s not necessarily the main expertise of a startup founder, even if it needs to be. So, how should they think about addressing growth marketing in 2021? What are the essentials they should do in their roles?
Every founder needs to have a growth mentality. They don’t need to memorize all the right buttons to push in an ads dashboard, but they need to be familiar and comfortable with the core work of gap-finding. That said, founders are by definition entrepreneurial — their company exists because they saw an opportunity that no one else did, and this is the fundamental work of growth as well.
Founders will fail if they adopt a mentality that someone else can or should do it for them. The founder’s job is to supply ambition and opinions, and then magnetize high-quality talent to come and pull the levers and bring their creative vision to life. There are many people who can do growth marketing — that is, they know how the platforms work, they understand the rules and the playbooks. But there are very few who can come up with truly visionary strategies that change the game altogether — those people become founders, and those companies become household names. So for a founder, I’d say the most important growth work is to continue to know your market and customer better than anyone else in the whole world, have an opinion about what’s missing, and work to bring the best talent to come in alongside you and be a thought partner, not just a button pusher.
Have you worked with a talented individual or agency who helped you find and keep more users?
Respond to our survey and help us find the best startup growth marketers!
With limited resources, how should early-stage companies think about what to focus on?
This is going to depend on the goals of your company. Are you planning to raise money and need to demonstrate certain KPIs? Are you bootstrapping and need to keep the lights on? Resources should always be allocated to the most strategic purposes, with the longest-term view you can afford. For some companies, this could mean forgoing revenue to focus on viral or word-of-mouth-driven user acquisition to demonstrate to future investors that there’s something special here. For other companies, perhaps in lower volume categories like enterprise, it’s about bringing a few strategic logos into the family as a signal to later customers and other stakeholders, including future employees and investors.
One thing that early-stage companies should always be focused on is building a top-shelf employer brand. You will only ever be as good as the talent you attract to your company, and interestingly growth can actually play a role in this. The best designers, engineers and product people are often flowing toward the companies that have the best growth. In that way, it’s a highly strategic role and function.
What do startups continue to get wrong?
You can’t truly outsource growth or any other core function; you can’t tack on customer acquisition after product development. At the end of the day, if you really think about it, all a company is, is a customer-acquisition engine. This needs to be core; wake up every day and think about growth, not just to hit revenue or user KPIs, but to build the company that the best people are clamoring to work at. It’s not about finding someone sufficient to solve your near-term problems; it’s about framing problems in a way that’s so compelling to the most creative, hardest-working people so that they can’t get it out of their heads. Go for talent moonshots, and figure out how to close them. The rest will fall in line from there.
When should a founder feel comfortable getting help from an outside expert or agency?
Anytime. Agencies are great. They are an extension of your talent, and the best agencies aren’t selling you — they have to be sold on your problem because they have their pick of companies just like yours. That’s the agency or outside expert you want to work with, because they’ll have a priceless perspective from the other best-in-class founders and teams they’ve worked with that they can bring to your challenge. Any agency can run Facebook ads (it’s not rocket science), but you want to find the team that’s solved the gnarliest problems for your hero companies. Then you’ll get not just an ads manager, but a teacher.
Powered by WPeMatico
If money is the ultimate commodity, how can fintechs — which sell money, move money or sell insurance against monetary loss — build products that remain differentiated and create lasting value over time?
And why are so many software companies — which already boast highly differentiated offerings and serve huge markets— moving to offer financial services embedded within their products?
A new and attractive hybrid category of company is emerging at the intersection of software and financial services, creating buzz in the investment and entrepreneurial communities, as we discussed at our “Fintech: The Endgame” virtual conference and accompanying report this week.
These specialized companies — in some cases, software companies that also process payments and hold funds on behalf of their customers, and in others, financial-first companies that integrate workflow and features more reminiscent of software companies — combine some of the best attributes of both categories.
Image Credits: Battery Ventures
From software, they design for strong user engagement linked to helpful, intuitive products that drive retention over the long term. From financials, they draw on the ability to earn revenues indexed to the growth of a customer’s business.
Fintech is poised to revolutionize financial services, both through reinventing existing products and driving new business models as financial services become more pervasive within other sectors.
The powerful combination of these two models is rapidly driving both public and private market value as investors grant these “super” companies premium valuations — in the public sphere, nearly twice the median multiple of pure software companies, according to a Battery analysis.
The near-perfect example of this phenomenon is Shopify, the company that made its name selling software to help business owners launch and manage online stores. Despite achieving notable scale with this original SaaS product, Shopify today makes twice as much revenue from payments as it does from software by enabling those business owners to accept credit card payments and acting as its own payment processor.
The combination of a software solution indexed to e-commerce growth, combined with a profitable payments stream growing even faster than its software revenues, has investors granting Shopify a 31x multiple on its forward revenues, according to CapIQ data as of May 26.
Before even talking about how investors should value these hybrid companies, it’s worth making the point that in both private and public markets, fintechs have been notoriously hard to value, fomenting controversy and debate in the investment community.
Powered by WPeMatico
This spring, Facebook confirmed it was testing Venmo-like QR codes for person-to-person payments inside its app in the U.S. Today, the company announced those codes are now launching publicly to all U.S. users, allowing anyone to send or request money through Facebook Pay — even if they’re not Facebook friends.
The QR codes work similarly to those found in other payment apps, like Venmo.
The feature can be found under the “Facebook Pay” section in Messenger’s settings, accessed by tapping on your profile icon at the top left of the screen. Here, you’ll be presented with your personalized QR code which looks much like a regular QR code except that it features your profile icon in the middle.
Underneath, you’ll be shown your personal Facebook Pay UR which is in the format of “https://m.me/pay/UserName.” This can also be copied and sent to other users when you’re requesting a payment.
Facebook notes that the codes will work between any U.S. Messenger users, and won’t require a separate payment app or any sort of contact entry or upload process to get started.
Users who want to be able to send and receive money in Messenger have to be at least 18 years old, and will have to have a Visa or Mastercard debit card, a PayPal account or one of the supported prepaid cards or government-issued cards, in order to use the payments feature. They’ll also need to set their preferred currency to U.S. dollars in the app.
After setup is complete, you can choose which payment method you want as your default and optionally protect payments behind a PIN code of your choosing.
The QR code is also available from the Facebook Pay section of the main Facebook app, in a carousel at the top of the screen.
Facebook Pay first launched in November 2019, as a way to establish a payment system that extends across the company’s apps for not just person-to-person payments, but also other features, like donations, Stars and e-commerce, among other things. Though the QR codes take cues from Venmo and others, the service as it stands today is not necessarily a rival to payment apps because Facebook partners with PayPal as one of the supported payment methods.
However, although the payments experience is separate from Facebook’s cryptocurrency wallet, Novi, that’s something that could perhaps change in the future.
Image Credits: Facebook
The feature was introduced alongside a few other Messenger updates, including a new Quick Reply bar that makes it easier to respond to a photo or video without having to return to the main chat thread. Facebook also added new chat themes including one for Olivia Rodrigo fans, another for World Oceans Day, and one that promotes the new F9 movie.
Powered by WPeMatico
On the heels of acquiring sales tax specialist TaxJar in April, today Stripe is making another big move in the area of tax. The $95 billion payments behemoth is launching a new product called Stripe Tax, which will provide automatic, updated sales tax calculations (covering sales tax, VAT and GST) and related accounting services to Stripe payments customers initially in some 30 countries and across the U.S.
Stripe Tax is a separate service from TaxJar, but the two are not unconnected. As Stripe Tax was being built out of Stripe’s offices in Dublin over the last several months, Stripe’s business lead for EMEA Matt Henderson told me that the team had identified TaxJar as a strong company in the field. That ultimately led to M&A between them.
Sales tax — and specifically a more seamless way to deal with charging and tracking sales tax — is a painful issue for people doing business online.
Digital and physical goods are taxed in over 130 countries, Stripe said, and within that there can be a huge amount of variation and compliance complexity, since codes get updated all the time, too. Mishandled sales tax, meanwhile, can result in pretty hefty fines, sometimes up to 30% interest on past-due amounts.
Unsurprisingly, a sales tax tool has been the most-requested feature from Stripe’s customers, Henderson said, a call that presumably only got louder in the last year, as e-commerce and digital transactions went through the roof with COVID-19.
Arguably, that makes Stripe Tax one of the company’s more significant product launches, not to mention the first since announcing its monster funding round earlier this year.
Previously, Stripe customers would have resorted to using a third-party service (like TaxJar) to work out sales tax. Or, more typically, those Stripe customers would have opted to limit the number of places they sold goods and services, in order to minimize the pain of dealing with multiple, complex and usually quite localized tax codes.
“No one leaps out of bed in the morning excited to deal with taxes,” said John Collison, co-founder and president of Stripe in a statement. “For most businesses, managing tax compliance is a painful distraction. We simplify everything about calculating and collecting sales taxes, VAT, and GST, so our users can focus on building their businesses.”
Stripe said that a survey of its customers found that two-thirds of respondents said the challenge of implementing sales tax actually limited their growth.
TaxJar has built a strong system for handling that, but the company — based out of Massachusetts but with a remote team — is primarily focused on the U.S. market, which has sales tax that is complicated enough (there are 11,000 different tax jurisdictions in the country).
That leaves a lot on the table for building out sales tax tools for the rest of the world: The wider focus of Stripe Tax thus fills a particular geographical gap for the company, regardless of how well TaxJar and Stripe integrate over time.
There is another key difference worth noting between the two.
TaxJar came to Stripe’s attention with an established operation — 23,000 customers at the time of the announcement. Stripe (wisely) bolted that on as a standalone business, which means that new and existing customers that use TaxJar can continue to use it as is. That is to say, at least for now, they do not need to be Stripe payments customers in order to use TaxJar, even if the integration between the two platforms will only improve over time.
Stripe Tax, on the other hand, is being built from the ground up as a product aimed specifically at increasing touchpoints and stickiness with Stripe customers.
Stripe Tax provides real-time tax calculation based on customer location and product sold; transparent itemizing for customers; tax ID management in areas (like Europe) where business customers can provide their code and get a reverse charge on tax if they are under a certain turnover threshold themselves; and reconciliation and reporting across all transactions to make filing and remittance easier.
But there is for now no way to use Stripe Tax outside of Stripe payments.
This could pose some problems for some customers. These days, many of the strongest retailers will take an “omnichannel” approach that might cover selling through marketplaces, selling through websites, selling through social media and more — and not all of those experiences may be powered by Stripe. It will be worth watching whether future iterations of Stripe Tax can account for that.
Stripe’s most significant product launch prior to Stripe Tax — Stripe Treasury last December — underscores how the company is currently very focused on diversifying outside of its basic payments business and opening the platform to much wider, more scaled transactions.
Treasury, which is still in invite-only mode, saw Stripe partner with established banks to provide a business banking service, providing a way for its customers to handle money that they generate from their Stripe-powered businesses.
The full country list where Stripe Tax is launching is Australia, Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, New Zealand, the Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, Switzerland, the United States and the United Kingdom.
Updated to correct the number of customers TaxJar has to 23,000.
Powered by WPeMatico
BukuWarung, a fintech focused on Indonesia’s micro, small and medium enterprises (MSMEs), announced today it has raised a $60 million Series A. The oversubscribed round was led by Valar Ventures, marking the firm’s first investment in Indonesia, and Goodwater Capital. The Jakarta-based startup claims this is the largest Series A round ever raised by a startup focused on services for MSMEs. BukuWarung did not disclose its valuation, but sources tell TechCrunch it is estimated to be between $225 million to $250 million.
Other participants included returning backers and angel investors like Aldi Haryopratomo, former chief executive officer of payment gateway GoPay, Klarna co-founder Victor Jacobsson and partners from SoftBank and Trihill Capital.
Founded in 2019, BukuWarung’s target market is the more than 60 million MSMEs in Indonesia, according to data from the Ministry of Cooperatives and SMEs. These businesses contribute about 61% of the country’s gross domestic product and employ 97% of its workforce.
BukuWarung’s services, including digital payments, inventory management, bulk transactions and a Shopify-like e-commerce platform called Tokoko, are designed to digitize merchants that previously did most of their business offline (many of its clients started taking online orders during the COVID-19 pandemic). It is building what it describes as an “operating system” for MSMEs and currently claims more than 6.5 million registered merchant in 750 Indonesian cities, with most in Tier 2 and Tier 3 areas. It says it has processed about $1.4 billion in annualized payments so far, and is on track to process over $10 billion in annualized payments by 2022.
BukuWarung’s new round brings its total funding to $80 million. The company says its growth in users and payment volumes has been capital efficient, and that more than 90% of its funds raised have not been spent. It plans to add more MSME-focused financial services, including lending, savings and insurance, to its platform.
BukuWarung’s new funding announcement comes four months after its previous one, and less than a month after competitor BukuKas disclosed it had raised a $50 million Series B. Both started out as digital bookkeeping apps for MSMEs before expanding into financial services and e-commerce tools.
When asked how BukuWarung plans to continue differentiating from BukuKas, co-founder and CEO Abhinay Peddisetty told TechCrunch, “We don’t see this space as a winner takes all, our focus is on building the best products for MSMEs as proven by our execution on our payments and accounting, shown by massive growth in payments TPV as we’re 10x bigger than the nearest player in this space.”
He added, “We have already run successful lending experiments with partners in fintech and banks and are on track to monetize our merchants backed by our deep payments, accounting and other data that we collect.”
BukuWarung’s new funding will be used to double its current workforce of 150, located in Indonesia, Singapore and India, to 300 and develop BukuWarung’s accounting, digital payments and commerce products, including a payments infrastructure that will include QR payments and other services.
Powered by WPeMatico
Early-stage startups are increasingly looking for alternative ways to access capital, meaning not every company wants to raise money from VCs or take on debt.
In recent years, a flurry of startups have emerged to give companies other options. (Think Pipe, for example.)
And today, San Francisco-based Architect Capital is a new firm that is launching with over $100 million in funds to serve as an “asset-based lender” to “high-growth,” early-stage tech companies. Specifically, the new firm aims to provide non-dilutive or less-dilutive financing options to asset-rich fintech, e-commerce and SaaS companies in the U.S. and Latin America, but with an emphasis on the latter. The region, Architect maintains, does not have a plethora of institutional financing available against assets.
The firm is not out to replace traditional venture capital or venture debt, emphasizes founder and CEO James Sagan, but rather to offer asset-based products that will complement them.
For some context, Sagan is no stranger to the startup world, having co-founded and served as managing partner of Arc Labs, an early-stage credit fund focused on lending to technology-enabled businesses. He’s been investing in Latin America for years, and recognized the need for new forms of financing to fund “novel and underappreciated assets.”
Also, he believes the region is home to “the most prominent fintech ecosystem in the world.”
To Sagan, traditional forms of equity and debt financing in the venture world are vital for things like growing headcount, but he believes they are “not engineered to support the growth of a company’s underlying financial products.”
“VC is highly dilutive and should be used for ROI activities such as hiring engineers and building great teams,” Sagan told TechCrunch. “It’s expensive to use equity to fund assets. Equity should not be put in a loan book. We’ll fund the loan book.”
Image Credits: Architect Capital founder James Sagan / Architect Capital
Architect’s goal is to provide “tailored and less dilutive funding,” especially to companies that produce repeatable revenues, such as SaaS and subscription businesses.
Sagan said he first discovered the strategy in 2015 when he was working for a multifamily office that was lending against a bunch of traditional assets.
“A colleague and good friend of mine started a business and raised some equity and venture debt, but he couldn’t find the asset-specific financing for the receivables he was generating,” Sagan recalls. “He was lending to small businesses and needed asset-specific financing against those receivables.”
Venture debt doesn’t really work for receivables-based lending because venture debt shops typically are underwriting assets, or rather, underwriting the quality of the investors in the company, Sagan believes.
“So we really tailor our underwriting towards those assets themselves right and those assets range from unsecured consumer receivables to secure small business receivables to real estate,” he told TechCrunch. “Essentially, we’re providing an additional instrument for asset-heavy businesses that will allow them to scale in a way that venture debt will not.”
Architect’s LPs are mostly large institutions, as opposed to traditional high net worth individuals. The firm’s average check size will land at around $10 million to $15 million.
“Our portfolio allocation is more concentrated in general,” Sagan said. “We expect to grow our AUM (assets under management) pretty precipitously.”
Architect Capital has invested in six companies since inception, including PayJoy, a company that delivers consumer financing and smartphone technology to customers in emerging markets; Forum Brands, a U.S.-based e-commerce marketplace aggregator; and ADDI, a fintech that aims to give Colombian consumers access to fair and affordable credit through point-of-sale-financing that recently raised $65 million.
Powered by WPeMatico
Our relationship with fashion has changed, and not just because of the pandemic. Months in lockdown means people are probably more aware of their fashion purchases and how they consume, given its been such a long time without socializing. But the oft-talked about “Clueless” wardrobe, which would allow women to both see into their collections, as well as share and potentially borrow from friends, has yet to go mainstream. Now a U.K. startup aims to change this.
The Little Black Door app, previously in closed beta, has just launched on the Apple iOS store here and on Android.
The app allows women to share the content of their wardrobes in an Instagram-like manner by creating collections (“Lookbooks”), as well as curate their private wardrobe for their own use, with a focus on premium and luxury fashion. Women, says LBD, can “see, style and share”, as well as resell and borrow clothes offline.
The Lookbook feature allows women to share wardrobes collections with friends or followers in a controlled way, a feature that lets users borrow from each other.
Co-founder Lexi Willetts tells me: “We’d simply gotten to a point where we didn’t know what fashion we owned, given that almost every other area of life allows this. Most fashion can be easily dash-boarded on our phones — we couldn’t understand why our wardrobe wasn’t! Equally the effort required to list an item on resale was also super hard.”
Willetts and co-founder Marina Pengilly came up with the app when they realized they could make as much as £30,000 a year reselling their luxury clothes and accessories online. LBD is going after four key trends: the rise of resale (Depop etc); rentals like Rent the Runway; AI in e-commerce; and re-receipts.
Users upload their wardrobe by taking a photo of an item. The app will then recognize the item using computer vision. Lookbooks showcases fashion collections; new and old also have an “I have this” button, allowing users to add items to their own wardrobes, or add as they buy automatically via links to retailers.
Another key feature allows users to see into their own wardrobes to see what they have, and, crucially, see how much they’ve spent, and own, in value.
Users can also create a Lookbook, not unlike on Pinterest, which can be shared with friends or a wider fashion community in a public or private group-controlled way. Lookbooks can be shared with a user’s network to allow them to see your style, or borrow the outfit in real life. As well as this, LBD itself also curates a feed of fashion/lifestyle news and surveys.
Willetts says partnerships with retailers and supplier deals for sales and fashion repairs are also in the offing.
LBD competes with the Save Your Wardrobe’ app.
But it is pushing the fact that it places a greater emphasis on sharing the wardrobe as well, also allowing people to borrow items With this focus on premium and luxury fashion this makes it a truly social wardrobe, says LBD.
The business model is likely to be a Premium version that unlocks extra features, affiliate revenues, advertising, and resale commissions.
Disclosure: Mike Butcher was an early, informal, adviser.
Powered by WPeMatico