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Tiger Global backs Nacelle with $50M for its e-commerce infrastructure
Consumer shift to buying online during the global pandemic — and keeping that habit — continues to boost revenue for makers of developer tools that help e-commerce sites provide better shopping experiences.
LA-based Nacelle is one of the e-commerce infrastructure companies continuing to attract investor attention, and at a speedy clip, too. It closed on a $50 million Series B round from Tiger Global. This is just six months after its $18 million Series A round, led by Inovia, and follows a $4.8 million seed round in 2020.
The company is working in “headless” commerce, which means it is disconnecting the front end of a website, a.k.a. the storefront, from the back end, where all of the data lives, to create a better shopping experience, CEO Brian Anderson told TechCrunch. By doing this, the back end of the store, essentially where all the magic happens, can be updated and maintained without changing the front end.
“Online shopping is not new, but how the customer relates to it keeps changing,” he said. “The technology for online shopping is not up to snuff — when you click on something, everything has to reload compared to an app like Instagram.”
More people shopping on their mobile devices creates friction due to downloading an app for each brand. That is “sucking the fun out of shopping online,” because no one wants that many apps on their phone, Anderson added.
Steven Kramer, board member and former EVP of Hybris, said via email that over the past two decades, the e-commerce industry went through several waves of innovation. Now, maturing consumer behaviors and expectations are accelerating the current phase.
“Retailers and brands are struggling with adopting the latest technologies to meet today’s requirements of agility, speed and user experience,” Kramer added. “Nacelle gives organizations a future-proof way to accelerate their innovation, leverage existing investments and do so with material ROI.”
Data already shows that COVID-era trends accelerated e-commerce by roughly five years, and Gartner predicts that 50% of new commerce capabilities will be incorporated as API-centric SaaS services by 2023.
Those kinds of trends are bringing in competitors that are also attracting investor attention — for example, Shopistry, Swell, Fabric, Commerce Layer and Vue Storefront are just a few of the companies that raised funding this year alone.
Anderson notes that the market continues to be hot and one that can’t be ignored, especially as the share of online retail sales grows. He explained that some of his competitors force customers to migrate off of their current tech stack and onto their respective platforms so that their users can get a good customer experience. In contrast, Nacelle enables customers to keep their tech stack and put components together as they see fit.
“That is painful in any vertical, but especially for e-commerce,” he said. “That is your direct line to revenue.”
Meanwhile, Nacelle itself grew 690% in the past year in terms of revenue, and customers are signing multiyear contracts, Anderson said.
Anderson, who is an engineer by trade, wants to sink his teeth into new products as adoption of headless commerce grows. These include providing a dynamic layer of functionality on top of the tech stack for storefronts that are traditionally static, and even introducing some livestream capabilities later this year.
As such, Nacelle will invest the new round into its go-to-market strategy and expand its customer success, partner relations and product development. He said Nacelle is already “the de facto standard” for Shopify Plus merchants going headless.
“We want to put everything in a tailor-made API for e-commerce that lets front-end developers do their thing with ease,” Anderson added. “We also offer starter kits for merchants as a starting point to get up-and-running.”
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Checkout wants to be Rapyd and Fast
Hello and welcome back to Equity, TechCrunch’s venture-capital-focused podcast, where we unpack the numbers behind the headlines. We’re back on this lovely Saturday with a bonus episode!
Again!
There is enough going on that to avoid failing to bring you stuff that we think matters, we are back yet again for more. This time around we are not talking Roblox, we’re talking about ecommerce, and a number of rounds — big and small — that have been raised in the space. Honest question: do y’all plan to release news on the same week? Are trends a social construct?
From Natasha, Grace, Danny, and your humble servant, here’s your run-down:
- Webflow raised $140 million in a round that it says it did not need. This is not a new thing. Some startups are doing well, and don’t burn much. So investors offer them more at a nice price. In this case $2.1 billion. (Webflow does no-code
- Checkout.com raised $450 million. The rich really do get richer. In this case the founders of Checkout.com, whose company is now worth around $15 billion Checkout.com does, you guessed, online checkout work. Which as Danny explains is complicated and critical.
- We also talked about this Bolt round, for context.
- And sticking to the ecommerce theme, Rapyd raised $300 million at around a $2.5 billion valuation. There is infinte money available for late-stage fintech.
- Early stage as well, it turns out, with Tradeswell raising $15.5 million to help businesses improve their net margins.
- Finally, ending with a chat on infrastructure, Nacelle closed an $18 million Series A.
And now we’re going back to bed.
Equity drops every Monday at 7:00 a.m. PST and Thursday afternoon as fast as we can get it out, so subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts.
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Nacelle raises $4.8M for its headless e-commerce platform
As e-commerce companies aim to capitalize on the online spending boom connected to shelter-in-place and keep the party going as physical retailers open back up, more are turning their attention to how they can juice the functionality of their online storefronts and improve experiences for shoppers. Enter Nacelle, an LA-based startup in the burgeoning “headless” e-commerce space.
The startup bills itself as a JAMstack for e-commerce, offering a developer platform that delivers greater performance and scalability to online storefronts. Nacelle has raised about $4.8 million to date in fundings led by Index Ventures and Accomplice. Some of the company’s other angel investors include Shopify’s Jamie Sutton, Klaviyo CEO Andrew Bialecki and Attentive CEO Brian Long.
Nacelle builds an easier path for e-commerce brands to embrace a headless structure. Headless web apps essentially mean a site’s front end is decoupled from the backend infrastructure, so it’s leaning fully on dedicated frameworks for each to deliver content to users. There are some notable benefits for sites going headless, including greater performance, better scalability, fewer hosting costs and a more streamlined developer experience. For e-commerce sites, there are also some notable complexities due to how storefronts operate and how headless CMSs need to accommodate dynamic inventories and user shopping carts.
“We asked how do you pair a very dynamic requirement with the generally static system that JAMstack offers, and that’s where Nacelle comes in,” CEO Brian Anderson tells TechCrunch.
Anderson previously operated a technical agency for Shopify Plus customers building custom storefronts, a venture that has led to much of the company’s early customers. Nacelle also recently hired Kelsey Burnes as the startup’s first VP of marketing; she joins from e-commerce plug-in platform Nosto.
Though Anderson described a flurry of benefits regarding Nacelle’s platform, many are the result of reduced latency that he says converts more users and pushes them to spend more. The startup has a particular focus on mobile storefronts, with Anderson noting that most desktop storefronts dramatically outperform mobile counterparts and that the speedier load times Nacelle enables on mobile can do a lot to overcome this.
Image Credits: Nacelle
As more brands embrace headless structures, Nacelle is aiming to manage the experience. Nacelle is optimized for Shopify users to get up and running the most quickly. Users can also easily integrate the system with popular CMSs like Contentful and Sanity. All in all, Nacelle sports integrations for more than 30 services, including payments platforms, SMS marketing platforms, analytics platforms and more. The goal is to minimize the need for users to migrate data or learn new workflows.
The company is unsurprisingly going after direct-to-consumer brands pretty heavily. Some of Nacelle’s early customers include D2C bedding startup Boll & Branch, cozy things marketplace Barefoot Dreams and fashion brand Something Navy. Most of Nacelle’s rollouts launch later this summer. Last month, Nacelle went live with men’s toiletries startup Ballsy and says that the storefront has already seen conversions increase 28%.
Nacelle is far from the only young entrant in this space. Just last month, Commerce Layer announced that it had raised $6 million in funding from Benchmark.
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