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E-commerce optimization startup Tradeswell raises $15.5M

After launching in October, Tradeswell is announcing today that it has raised $15.5 million in Series A funding.

Co-founder and CEO Paul Palmieri previously led digital ad company Millennial Media (now owned by TechCrunch’s parent company Verizon Media), and he said the e-commerce market today is similar to the online ad market when he was leading Millennial — ready for more optimization and automation.

Tradeswell focuses on six components of e-commerce businesses — marketing, retail, inventory, logistics, forecasting, lifetime value and financials — with the key goal of allowing those businesses to improve their net margins, rather than simply driving more clicks or purchases. The platform can fully automate some processes, such as buying online ads.

To illustrate what it can accomplish, Tradeswell pointed to the work it did with a personal care brand on Amazon Prime Day, with total sales doubling versus the previous Prime Day and profits increasing 67%.

The startup has now raised a total of $18.8 million. The Series A was led by SignalFire, which also led Tradeswell’s seed round, while Construct Capital, Allen & Company and The Emerson Group also participated.

“With the explosion of ecommerce over the past year, Tradeswell is perfectly positioned to help brands manage the complexity of online sales across an ever-increasing number of platforms and marketplaces,” said SignalFire founder and CEO Chris Farmer in a statement. “Paul and his team bring together a unique blend of experience in data, marketing and logistics to address the challenges of today and a rapidly evolving market in the years ahead with a central command center to optimize profitable growth.”

Palmieri said the new funding will allow Tradeswell to continue investing in the product, which will also mean building more integrations so that more types of data become “more liquid,” which in turn means that the platform can “make much more real-time decisions.”

When Tradeswell launched publicly last fall, it already had 100 customers, and Palmieri told me that number has subsequently grown past 150. Nor does he expect the consumer shift in e-commerce to disappear once the pandemic ends.

“Some of it probably goes back to the way it was, some of it stays online,” he said. “I do think it’s important to point out there’s something in the middle — that something is this notion of high convenience, that is semi-brick-and-mortar with [elements of e-commerce], whether that’s mobile ordering or something like an Instacart.”

Naturally, he sees Tradeswell as the key platform to help businesses navigate that shift.

 

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Millennial Media’s Paul Palmieri launches Tradeswell, a startup promising to fix e-commerce margins

A new startup called Tradeswell said it’s using artificial intelligence to help direct-to-consumer and e-commerce brands build healthier businesses.

The company is led by Paul Palmieri, who previously took mobile advertising company Millennial Media public and then sold it to TechCrunch’s corporate parent AOL (now Verizon Media). Afterwards, Palmieri founded Grit Capital Partners, but he told me he decided to join Tradeswell as a co-founder and CEO because he was so excited about the vision.

Palmieri said that just as Millennial helped independent app developers get smarter about advertising, Tradeswell gives upstart e-commerce companies the data they need to compete with “the big platform behemoths.”

It’s no secret that a number of direct-to-consumer companies have struggled to make a profit due to challenging unit economics. Palmieri suggested that one reason for this is the fragmentation of their tools and data.

“If you’re selling something like Campbell’s Soup, you want to figure out, how is your tomato soup business and your chicken soup business?” Palmieri said. “Today, brands are saying, ‘How’s my Amazon business? How’s my Shopify business? How’s my Shopify business on Instagram?’ ”

So rather than relying on those platforms for data, Palmieri suggested brands want an independent platform that they trust to bring everything together, “where it’s a combination of a Bloomberg terminal plus a trading platform.”

Tradeswell’s AI focuses in six key areas of an e-commerce business: marketing, retail, inventory, logistics, forecasting, lifetime value and financials. Palmieri suggested that in some cases (like ad-buying), Tradeswell will replace existing software, while in other cases it will integrate.

“Think of us as a neural AI layer, where [a brand] might have different platform relationships, which are the fingers, and we’re the AI brain,” he said. “We’re giving brands insights and forecasts: If you make this change, we anticipate XYZ will happen.”

In some cases, like the aforementioned advertising, Tradeswell can also support full automation, so that merchants don’t have to worry about “setting up and tearing down hundreds of campaigns.”

The key, Palmieri said, is that the platform has access to the business’ full financials, so it can optimize for net margins, rather than simply driving the most impressions or clicks or sales.

While Tradeswell is only coming out of stealth mode today, it’s already been working with more than 100 brands. For example, Steve Tracy of Red Monkey Foods and San Francisco Salt Company said in a statement that the startup’s “unique, comprehensive, algorithmic approach has helped us grow sales, identify commercialization opportunities and forecast far more accurately.”

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AOL Confirms It Is Buying Millennial Media In $238M Deal To Expand In Mobile Ads

Aol donuts This just in: AOL, itself acquired by Verizon for $4.4 billion earlier this year, has announced that it is making another purchase of its own. It is buying Millennial Media as it continues to build out its presence in digital advertising and specifically mobile ads. AOL will be paying $1.75/share for publicly traded Millennial, working out to an enterprise value of $238 million after… Read More

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Sources: Aol/Verizon Eyes Millennial Media For Around $300M In Mobile Ad Push

Aol donuts AOL, recently acquired by Verizon for $4.4 billion, appears to be wasting little time in continuing to build out its advertising business. Sources tell TechCrunch that the company has been in the process of buying mobile ad network Millennial Media. AOL started “kicking the tires” on Millennial weeks ago, one source says, but things were slowed down by AOL itself getting… Read More

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