Getting inside the mind of customers is a challenge as behaviors and demands shift, but Clootrack believes it has cracked the code in helping brands figure out how to do that.
It announced $4 million in Series A funding, led by Inventus Capital India, and included existing investors Unicorn India Ventures, IAN Fund and Salamander Excubator Angel Fund, as well as individual investment from Jiffy.ai CEO Babu Sivadasan. In total, the company raised $4.6 million, co-founder Shameel Abdulla told TechCrunch.
Clootrack is a real-time customer experience analytics platform that helps brands understand why customers stay or churn. Shameel Abdulla and Subbakrishna Rao, who both come from IT backgrounds, founded the company in 2017 after meeting years prior at Jiffstore, Abdulla’s second company that was acquired in 2015.
Clootrack team. Image Credits: Clootrack
Business-to-consumer and consumer brands often use customer satisfaction metrics like Net Promoter Score to understand the customer experience, but Abdulla said current methods don’t provide the “why” of those experiences and are slow, expensive and error-prone.
“The number of channels has increased, which means customers are talking to you, expressing their feedback and what they think in multiple places,” he added. “Word of mouth has gone digital, and you basically have to master the art of selling online.”
Clootrack turns the customer experience data from all of those first-party and third-party touchpoints — website feedback, chat bots, etc. — into granular, qualitative insights that give brands a look at drivers of the experience in hours rather than months so that they can stay on top of fast-moving trends.
Abdulla points to data that show a customer’s biggest driver of brand switch is the experience they receive. And, that if brands can reduce churns by 5%, they could be looking at an increase in profits of between 25% and 95%.
Most of the new funding will go to product development so that all data aggregations are gathered from all possible touchpoints. His ultimate goal is to be “the single platform for B2C firms.”
The company is currently working with over 150 customers in the areas of retail, direct-to-consumer, banking, automotive, travel and mobile app-based services. It is growing nine times year over year in revenue. It is mainly operating in India, but Clootrack is also onboarding companies in the U.S. and Europe.
Parag Dhol, managing director of Inventus, said he has known Abdulla for over five years. He had looked at one of Abdulla’s companies for investment, but had decided against it due to his firm being a Series A investor.
Dhol said market research needs an overhaul in India, where this type of technology is lagging behind the U.S.
“Clootrack has a very complementary team with Shameel being a complete CEO in terms of being a sales guy and serial entrepreneur who has learned his lessons, and Subbu, who is good at technology,” he added. “As CMOs realize the value in their unstructured data inside of their own database of the customer reviews and move to real-time feedback, these guys could make a serious dent in the space.”
Australian buy now, pay later (BNPL) company Zip this week acquired South Africa-based BNPL player Payflex for an undisclosed amount.
It’s a piece of news that once again highlights the hype around BNPL services and the quest for global dominance among the leading players.
This year we have covered BNPL services from the likes of Afterpay, Klarna and Affirm. And tech and payments giants Apple, Square, PayPal and Visa have joined in the action, too, massively funneling cash to their respective BNPL initiatives (for one, Square acquired Afterpay).
Australia, the U.K. and the U.S. are key markets for BNPL services. The U.S. market is so big that the number of BNPL service users is expected to hit 45 million by year’s end, representing an 81% growth from last year. But despite its Western focus, BNPL is exploding in other markets driven by a collective effort from local and global players.
For instance, in the Middle East, companies like tabby and Tamara have raised millions in debt and equity financing to provide BNPL services. Also, Checkout is a significant shareholder in Tamara; Afterpay is one in PostPay, while Zip acquired Spotii for $26 million after initially investing in the company in December 2020.
Spotii isn’t the only acquisition Zip has made this past year. The Australian company also bought U.S.-based QuadPay and Twisto, a BNPL service in the Czech Republic, to expand footprints in both regions.
Payflex is the latest addition to that list. The company, founded in 2017, claims to be the first and largest BNPL player in South Africa with more than 1,000 merchants and 135,000 customers. Before fully acquiring Payflex, Zip had a 25% stake when it invested in the South African BNPL service six months ago.
Zip’s entry to Africa is important for several reasons. First, the continent is a largely untapped market that has enormous growth potential.
Credit appetite on the continent is very much in its infancy compared to Western markets, but it is growing rapidly. These days, people take loans to finance their needs at ridiculous interest rates while lending companies report low NPL ratios. Think of what happens when these consumers get a taste of low or no-interest alternative financing options that BNPL players like Zip provide: adoption rates will be off the charts.
Second, there’s a lack of infrastructure and BNPL innovation that only new entrants like Zip can execute because it has a large monetary chest.
And with the absence of credit cards and data on the continent, Zip can provide a competitive advantage with its technology, gather alternative data and build creditworthiness for customers in South Africa and other markets it plans to expand “with sizable underbanked, digitally savvy populations.”
Two of those markets are Egypt and Nigeria. If Zip expands to these regions, it will face competition from local players like Carbon, Shahry, M-Kopa, CredPal and CDCare, which are already pulling their weight. African e-commerce giant Jumia is also rumored to be revamping its BNPL service; it started one years ago but was discontinued after gaining little traction.
That said, Africa doesn’t have a concrete market leader yet since most of these products are yet to reach mass scale. On the other hand, Zip has been quite aggressive with its expansion into other markets — evident in some of its numbers.
The company currently serves 51,000 merchants and 7.3 million customers across 12 markets. This fiscal year, June 2021, a period when most of its acquisitions have occurred, Zip hit $5.8 billion in total transaction volume, up 176% year-over-year (YoY).
Zip numbers are impressive, but if there’s anything we’ve learnt from the BNPL business it’s that it isn’t a winner-takes-all market. If Zip makes significant headway and cracks the market, expect more global BNPL players to bring the heat. Also, local players will be encouraged to step up their game because global players have surplus cash to burn if they move into Africa, which is a win-win for the market.
YouTravel.Me is the latest startup to grab some venture capital dollars as the travel industry gets back on its feet amid the global pandemic.
Over the past month, we’ve seen companies like Thatch raise $3 million for its platform aimed at travel creators, travel tech company Hopper bring in $175 million, Wheel the World grab $2 million for its disability-friendly vacation planner, Elude raise $2.1 million to bring spontaneous travel back to a hard-hit industry and Wanderlog bag $1.5 million for its free travel itinerary platform.
Today YouTravel.Me joins them after raising $1 million to continue developing its online platform designed for matching like-minded travelers to small-group adventures organized by travel experts. Starta VC led the round and was joined by Liqvest.com, Mission Gate and a group of individual investors like Bas Godska, general partner at Acrobator Ventures.
Olga Bortnikova, her husband Ivan Bortnikov and Evan Mikheev founded the company in Europe three years ago. The idea for the company came to Bortnikova and Bortnikov when a trip to China went awry after a tour operator sold them a package where excursions turned out to be trips to souvenir shops. One delayed flight and other mishaps along the way, and the pair went looking for better travel experiences and a way to share them with others. When they couldn’t find what they were looking for, they decided to create it themselves.
“It’s hard for adults to make friends, but when you are on a two-week trip with just 15 people in a group, you form a deep connection, share the same language and experiences,” Bortnikova told TechCrunch. “That’s our secret sauce — we want to make a connection.”
Much like a dating app, the YouTravel.Me’s algorithms connect travelers to trips and getaways based on their interests, values and past experiences. Matched individuals can connect with each via chat or voice, work with a travel expert and complete their reservations. They also have a BeGuide offering for travel experts to do research and create itineraries.
Since 2018, CEO Bortnikova said that YouTravel.Me has become the top travel marketplace in Eastern Europe, amassing over 15,900 tours in 130 countries and attracting over 10,000 travelers and 4,200 travel experts to the platform. It was starting to branch out to international sales in 2020 when the global pandemic hit.
“Sales and tourism crashed down, and we didn’t know what to do,” she said. “We found that we have more than 4,000 travel experts on our site and they feel lonely because the pandemic was a test of the industry. We understood that and built a community and educational product for them on how to build and scale their business.”
After a McKinsey study showed that adventure travel was recovering faster than other sectors of the industry, the founders decided to go after that market, becoming part of 500 Startups at the end of 2020. As a result, YouTravel.Me doubled its revenue while still a bootstrapped company, but wanted to enter the North American market.
The new funding will be deployed into marketing in the U.S., hiring and attracting more travel experts, technology and product development and increasing gross merchandise value to $2.7 million per month by the end of 2021, Bortnikov said. The goal is to grow the number of trips to 20,000 and its travel experts to 6,000 by the beginning of next year.
Godska, also an angel investor, learned about YouTravel.Me from a mutual friend. It happened that it was the same time that he was vacationing in Sri Lanka where he was one of very few tourists. Godska was previously involved in online travel before as part of Orbitz in Europe and in Russia selling tour packages before setting up a venture capital fund.
“I was sitting there in the jungle with a bad internet connection, and it sparked my interest,” he said. “When I spoke with them, I felt the innovation and this bright vibe of how they are doing this. It instantly attracted me to help support them. The whole curated thing is a very interesting move. Independent travelers that want to travel in groups are not touched much by the traditional sector.”
Pancake brought in a $350,000 seed round to develop its home design platform that leverages furniture you already have in your home with a designer’s fresh eye on your space.
Maria Jose Castro and Roberto Meza, both from Costa Rica, started the company in 2020, based on their own experience of transitioning to work-from-home and needing to outfit a space. However, design services can be expensive, and therefore not accessible to everyone.
Pancake is reinventing the way you can work with an interior designer and get a rendering of your space to work from. Customers can go on the website and book a session with a designer, providing them with measurements and photos of the room.
The designer then prepares a rendering of the space and a deck to explain the design and how the customer will do it — and if paint or furniture is needed that isn’t already available, Pancake will show the customer where to find it. Future features of the site will include connecting with furniture providers, Jose Castro told TechCrunch.
Meza called the company “furniture-as-a-service,” with the main focus to reuse what already exists in a space to create healthy, sustainable spaces that someone can work in, live in and enjoy all at the same time. While that may seem like a tall order, he said that with everyone suddenly together during the global pandemic, relationships are better when people are in a space they like.
“Wellness in construction is what I do, and we wanted to create that with Pancake,” he added. “Sometimes it is the little things that create a space and makes you feel good, or not feel good.”
Pancake plans to use its funding to further develop its platform and add new features like an ecological footprint calculator so customers can see how sustainable their designs are. The company also prides itself on transparent pricing. An average two-hour session with a designer is $199, and the designer will add to the budget if items like paint and new furniture are needed.
Christian Rudder, co-founder of OkCupid, is the lead investor in the seed round. He said that he doesn’t typically invest at the seed stage, but was impressed with the progress Pancake has made in a short period of time. This includes marketing tests on social media platforms that yielded a respectable return on investment, he added.
Meanwhile, Pancake has facilitated over 100 designer sessions and has begun to see referrals and repeat customers who want to design additional rooms in their house. That has translated into 200% month over month revenue growth, on average, despite having to stop for four months during the pandemic, Meza said. Up next, the company will continue to build out its brand and revenue model as it advances to a Series A round next year.
French startup Cajoo is raising some money in order to compete more aggressively in the new and highly competitive category of food delivery companies. Interestingly, the lead investor in today’s funding round is Carrefour, the supermarket giant. Headline (formerly e.ventures) is also participating in the round as well as existing investors Frst and XAnge.
Carrefour’s investment isn’t just a financial investment. Cajoo will take advantage of Carrefour’s purchasing organization. This way, Cajoo will be able to offer more products to its customers.
Cajoo is part of a group of startups that try to create a whole new category of grocery deliveries. The company operates dark stores and manages its own inventory of products. Customers can then order items without having to think whether they’ll be home when the delivery happens. Around 15 minutes later, a delivery person shows up with your groceries.
“It’s a category that is incredibly capital intensive,” co-founder and CEO Henri Capoul told me. “We own the entire value chain. If we want to expand, we have to launch hubs, we have to buy products.”
With $40 million on its bank account, Cajoo now wants to solidify its strong market position in its home country. The service is currently live in 10 French cities — Paris, Neuilly-sur-Seine, Levallois-Perret, Boulogne-Billancourt, Lille, Lyon, Toulouse, Bordeaux and Montpellier.
And yet, the company is already facing some competition in Paris for instance. But Henri Capoul sees it as market validation. “There are a lot of players that have raised a lot of money. But it’s a regulated market. We own all our products and we have to comply with regulation. We can’t sell everything at a loss,” he said.
While Henri Capoul expects some sort of consolidation down the road, the company is doing everything to remain a big, independent company. “European champions will be national champions first. Right now, some players can overcome a lack of products with discounts. I’m convinced that the future of this category will be represented by three or four local players that are strong in other countries.” Henri Capoul said.
Cajoo is currently the only French company operating at this scale in this category. So it’s clear that the company sees itself as a market leader in France first. But the company is already looking at other markets as well — Belgium, Italy, Spain, maybe Portugal or Eastern Europe countries.
But first, the company wants to grow its team. The number of employees working in the HQ is going to double by the end of the year. Operations and delivery teams will also grow quite drastically. The company expects a fivefold increase by the end of the year on this front.
Some delivery people are directly hired by Cajoo. But the company is also relying on partners — both contracting companies and freelancers. So the company faces some of the challenges that Deliveroo and Uber Eats also face.
Cajoo might be a great business idea, but users will have to ask themselves whether it really solves an important need or they’re just using it because it exists. Instant delivery companies could have a real impact on brick-and-mortar shops over the long run.
Berlin Brands Group — one of the new wave of e-commerce startups hoping to build lucrative economies of scale around buying up smaller brands that sell on marketplaces like Amazon and using technology to run and scale them more efficiently — has picked up a big round of funding to fill out that mission. The startup has closed a round of $700 million, comprising both equity and debt, which it will use in part to continue building its fulfillment and logistics infrastructure, as well as its tech platform, and in part to buy more companies.
BBG confirmed that the investment — one of the biggest to date in the space — boosts its valuation to over $1 billion.
Bain Capital is leading the equity portion of this round. The deal will also see it buy out a previous investor, Ardian, for an undisclosed amount that is separate to the $700 million raise.
This funding round is the second announced by BBG this year. In January it announced it would be investing $302 million off its own balance sheet for M&A, and in April it announced a debt round of $240 million. This latest $700 million is different in that it includes the equity component alongside the equity.
BBG got its start initially developing its own products and selling them on Amazon and other marketplaces — founder and CEO CEO Peter Chaljawski was a DJ in a previous life and started with a focus on audio equipment he developed for himself.
Over time, it saw an opportunity to diversify that into a wider consolidation play, where BBG would also acquire and merge third party brands into its business, tapping into the opportunity to provide the owners of the third-party businesses an exit route and bring those smaller brands more scale, more marketing nous, and more tech to improve the efficiency of their operations.
Today the mix totals 3,700 products and 14 own brands, including Klarstein (kitchen appliances), auna (home electronics and music equipment), Capital Sports (home fitness) and blumfeldt (garden). BBG says it has access to some 1.5 billion e-commerce customers across various marketplaces where it sells goods in Europe, the UK, the U.S. and Asia. Notablym unlike many others in the same space as BBG, it is focused on more than Amazon, with some 100 channels in 28 countries.
That list of “many others in the same space” is a long one and seemingly growing by the day. Yesterday, two of them — Heroes and Olsam — respectively raised $200 million and $165 million. Others leveraging the opportunity of consolidating merchants that sell via Fulfillment by Amazon include Suma Brands ($150 million); Elevate Brands ($250 million); Perch ($775 million); factory14 ($200 million); Thrasio (currently probably the biggest of them all in terms of reach and money raised and ambitions), Heyday, The Razor Group, Branded, SellerX, Berlin Brands Group (X2), Benitago, Latin America’s Valoreo and Rainforest and Una Brands out of Asia.
As more startups enter the fray, all battling to buy the best of the third-party brands will become more of a challenge, and so the backing of Bain should help BBG shore up against that competition.
“With Bain Capital’s commitment and the additional funding secured, we have set our next milestone on our path to building a global house of brands,” said Chaljawski in a statement. “This allows us to tackle strategic goals of acquiring and developing brands globally, as well as the operational and logistical expansion. Bain Capital’s experience working with founders worldwide will help us continue our evolution as a leading e-commerce company in scaling brands.”
“BBG is a disruptive leader in the rapidly changing consumer goods space. Their ability to develop and scale brands that meet current consumer trends through their highly efficient e-commerce platform gives the company tremendous growth potential in a fast-growing market,” added Miray Topay, MD at Bain Capital Private Equity. “We have partnered with many founder-led management teams and look forward to helping Peter and his team achieve their goal of becoming a global leader in consumer e-commerce”.
The financing comes just just over two months after the startup raised $27 million in an equity funding round led by Norwest Venture Partners.
Brenton Howland, Ruben Amar and Alex Kopco founded New York-based Forum Brands in the summer of 2020, during the height of the COVID-19 pandemic.
“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 told me at the time of the company’s last raise. “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.”
Since we covered the company in June, Forum Brands says it has acquired several new brands, including Bonza, a seller of pet products, and Simka Rose, a baby-focused brand specializing in eco-friendly products. Simka sells in the U.S. and the EU and is an example of how Forum is expanding globally, Amar said.
Howland and Amar emphasize that the Forum team continues to focus on quality over quantity when evaluating potential acquisitions. Although they meet with 15-20 founders a week, they are selective in which companies they choose to acquire.
“We continue to be a quality-first buyer, and not quantity-driven,” Amar said, noting that the company will still help a company build its brand even if it does not yet meet Forum’s quality threshold or if the founders are just not yet ready to sell.
The new funds will be used to, naturally, acquire more e-commerce companies. As part of the debt financing, Sajal Srivastava, co-CEO and co-founder of TriplePoint Capital, will be joining Forum’s board of directors.
“We are impressed not only by Forum’s long-term strategy and ability to leverage technology and deep collective e-commerce and M&A experience but also by how Forum cultivates relationships with their sellers both before and after partnering with them,” he said in a written statement.
At the time of its June raise, Forum had about 20 employees. As of today, it has about 40.
Forum’s technology employs “advanced” algorithms and over 100 million data points to populate brand information into a central platform in real time, instantly scoring brands and generating accurate financial metrics.
On August 31, we covered the news that on the heels of Heroes announcing a $200 million raise to double down on buying and scaling third-party Amazon Marketplace sellers, another startup out of London aiming to do the same announced some significant funding of its own. Olsam, a roll-up play that is buying up both consumer and B2B merchants selling on Amazon by way of Amazon’s FBA fulfillment program, closed on $165 million — a combination of equity and debt that it will be using to fuel its M&A strategy, as well as continue building out its tech platform and to hire more talent.
Even without staffing shortages, local merchants have difficulty answering calls while all hands are busy, and Goodcall wants to alleviate some of that burden from America’s 30 million small businesses.
Goodcall’s free cloud-based conversational platform leverages artificial intelligence to manage incoming phone calls and boost customer service for businesses of all sizes. Former Google executive Bob Summers left Google back in January, where he was working on Area 120 — an internal incubator program for experimental projects — to start Goodcall after recognizing the call problem, noting that in fact 60% of the calls that come into merchants go unanswered.
“It’s frustrating for you and for the person calling,” Summers told TechCrunch. “Every missed call is a lost opportunity.”
Goodcall announced its launch Wednesday with $4 million in seed funding led by strategic investors Neo, Foothill Ventures, Merus Capital, Xoogler Ventures, Verissimo Ventures and VSC Ventures, as well as angel investors including Harry Hurst, founder and co-CEO of Pipe.com, and Zillow co-founder Spencer Rascoff.
Goodcall mobile agent. Image Credits: Goodcall
Restaurants, shops and merchants can set up on Goodcall in a matter of minutes and even establish a local phone number to free up an owner’s mobile number from becoming the business’ main line. The service is initially deployed in English and the company has plans to operate in Spanish, French and Hindi by 2022.
Merchants can choose from six different assistant voices and monitor the call logs and what the calls were about. Goodcall can also capture consumer sentiment, Summers said.
The company offers three options, including its freemium service for solopreneurs and business owners, which includes up to 500 minutes per month of Goodcall services for a single phone line. Up to five additional locations and five staff members costs $19 per month for the Pro level, or the Premium level provides unlimited locations and staff for $49 per month.
During the company’s beta period, Goodcall was processing several thousands of calls per month. The new funding will be used to continue to offer the free service, hire engineers and continue product development.
In addition to the funding round, Goodcall is unveiling a partnership with Yelp to tap into its database of local businesses so that those owners and managers can easily deploy Goodcall. Yelp data shows that more than 500,000 businesses opened during the pandemic. The company pulls in from Yelp a merchant’s open hours, location, if they offer Wi-Fi and even their COVID policy.
“We are partnering with Yelp, which has the best data on small businesses, and other large distribution channels to get our product to market,” Summers said. “We are bringing technology into an industry that hasn’t innovated since the 1980s and democratizing conversational AI for small businesses that are the main driver of job creation, and we want to help them grow.”
The acquisition is Palo Alto-based Duda’s first deal, and follows the website development platform’s $50 million Series D round in June that brings its total funding to $100 million to date. Duda co-founder and CEO Itai Sadan declined to comment on the acquisition amount.
Duda, which works with digital agencies and SaaS companies, has approximately 1 million published paying sites, and the acquisition was driven by the company seeing a boost in e-commerce websites as a result of the global pandemic, he told TechCrunch.
This was not just about a technology acquisition for Duda, but also a talented team, Sadan said. The entire Snipcart team of 12 is staying on, including CEO Francois Lanthier Nadeau; the companies will be fully integrated by 2022 and the first collaborative versions will come out.
When he met the Snipcart team, Sadan thought they were “super experienced and held the same values.”
“We share many of the same types of customers, many of which are API-first,” he added. “If our customers need more headless commerce, they can build their own front end using Snipcart. Their customers will benefit from us growing the team — we plan to double it in the next year and roll out more features at a faster pace.”
The global retail e-commerce market is estimated to grow by 50% to $6.3 trillion by 2024, according to Statista. Duda itself has experienced a year over year increase of 265% in e-commerce sites being built on its platform, which Sadan said was what made Snipcart an attractive acquisition to further accelerate and manage its growth that includes over 17,000 customers.
Together, the companies will offer new capabilities, like payment and membership tools inside of the Duda platform. Many of Duda’s customers come with inventory and don’t want to manage it on another e-commerce platform, so Snipcart will be that component for taking their inventory and making it shoppable on the web.
“Everyone is thinking about how to introduce transactions into their websites and web experiences, and that is what we were looking for in an e-commerce platform,” Sadan said.
Meet Trustshare, a London-based startup that is working on escrow infrastructure for online classified, B2B marketplaces, trade directories and more. It’s a white-label platform that can be integrated with online marketplaces in just a few lines of code.
If you’ve ever tried to sell something expensive on the web, you know that it’s hard to know for sure that you’re not getting scammed. For instance, that person that is trying to buy your old phone from you — should you send the phone first or ask the buyer to send the money first?
If a marketplace relies on Trustshare for payments, buyers first have to checkout and leave money into a dedicated transaction-based account. Trustshare can also handle identity verification steps, such as KYC and AML checks (Know Your Customer and Anti-Money Laundering). The seller can check the status of the funds. Once the buyer has received the product, they can release funds to the seller.
Behind the scenes, Trustshare generates a dedicated IBAN per transaction. Customers can deposit money using bank transfers or cards. In the U.K. and Europe, Trustshare takes advantage of open banking regulation so that users can connect to their bank account from the checkout flow.
If you don’t want to tweak your site’s code, you can also use Trustshare for offline sales and transactions that happen over email or messaging apps. The company lets you generate QR codes or payment links to initiate a payment.
The startup has raised an angel round from several business angels, such as Cazoo and Zoopla founder Alex Chesterman and Carwow founder James Hind. After that, Trustshare raised a $3.2 million seed round (£2.3 million) led by Nauta Capital.
Many companies could leverage Trustshare to launch their own marketplace as escrow payment is one of the biggest pain points. For instance, you can imagine luxury brands launching their own marketplaces of handbags and watches, new car marketplaces focused on one type of cars in particular, etc.
“Our 5 lines of code branded escrow checkout is taking many marketplaces, brands that consumers know and trust, transactional. Really, this is just the start. Our borderless escrow infrastructure is incredibly powerful, and we plan to launch new products including instant pay-throughs, baskets and projects to make payments as quick and easy as sending an email,” co-founder and CEO Nick Fulton said in a statement.
Trustshare is built on top of existing payment infrastructure. That’s why it supports 180 countries and 30 currencies already. The company’s initial clients include Watchcollecting, Bookabuilder and U.K. trade body FENSA’s Deposit Protection service.
On the heels of Heroes announcing a $200 million raise earlier today, to double down on buying and scaling third-party Amazon Marketplace sellers, another startup out of London aiming to do the same is announcing some significant funding of its own. Olsam, a roll-up play that is buying up both consumer and B2B merchants selling on Amazon by way of Amazon’s FBA fulfillment program, has closed $165 million — a combination of equity and debt that it will be using to fuel its M&A strategy, as well as continue building out its tech platform and to hire more talent.
Apeiron Investment Group — an investment firm started by German entrepreneur Christian Angermayer (known first for biopharmaceuticals, then investing and crypto, including playing a role in SoftBank investing in Wirecard) — led the Series A equity round, with Elevat3 Capital (another Angermayer firm that has a strategic partnership with Founders Fund and Peter Thiel) also participating. North Wall Capital was behind the debt portion of the deal. We have asked and Olsam is only disclosing the full amount raised, not the amount that was raised in equity versus debt. Valuation is also not being disclosed.
Being an Amazon roll-up startup from London that happens to be announcing a fundraise today is not the only thing that Olsam has in common with Heroes. Like Heroes, Olsam is also founded by brothers.
Sam Horbye previously spent years working at Amazon, including building and managing the company’s Business Marketplace (the B2B version of the consumer Marketplace); while co-founder Ollie Horbye had years of experience in strategic consulting and financial services.
Between them, they had also built and sold previous marketplace businesses, and they believe that this collective experience gives Olsam — a portmanteau of their names, “Ollie” and “Sam” — a leg up when it comes to building relationships with merchants; identifying quality products (versus the vast seas of search results that often feel like they are selling the same inexpensive junk as each other); and understanding merchants’ challenges and opportunities, and building relationships with Amazon and understanding how the merchant ecosystem fits into the e-commerce giant’s wider strategy.
Olsam is also taking a slightly different approach when it comes to target companies, by focusing not just on the usual consumer play, but also on merchants selling to businesses. B2B selling is currently one of the fastest-growing segments in Amazon’s Marketplace, and it is also one of the more overlooked by consumers.”It’s flying under the radar,” Ollie said.
“The B2B opportunity is very exciting,” Sam added. “A growing number of merchants are selling office supplies or more random products to the B2B customer.”
Estimates vary when it comes to how many merchants there are selling on Amazon’s Marketplace globally, ranging anywhere from 6 million to nearly 10 million. Altogether those merchants generated $300 million in sales (gross merchandise value), and its growing by 50% each year at the moment.
And consolidating sellers — in order to achieve better economies of scale around supply chains, marketing tools and analytics, and more — is also big business. Olsam estimates that some $7 billion has been spent cumulatively on acquiring these businesses, and there are more out there: Olsam estimates that there are some 3,000 businesses in the UK alone making more than $1 million each in sales on Amazon’s platform.
(And to be clear, there are a number of other roll-up startups beyond Heroes also eyeing up that opportunity. Raising hundreds of millions of dollars in aggregate, others have made moves this year include Suma Brands ($150 million); Elevate Brands ($250 million); Perch ($775 million); factory14 ($200 million); Thrasio (currently probably the biggest of them all in terms of reach and money raised and ambitions), Heyday, The Razor Group, Branded, SellerX, Berlin Brands Group (X2), Benitago, Latin America’s Valoreo and Rainforest and Una Brands out of Asia.)
“The senior team behind Olsam is what makes this business truly unique,” said Angermayer in a statement. “Having all been successful in building and selling their own brands within the market and having worked for Amazon in their marketplace team – their understanding of this space is exceptional.”
Can reading glasses actually be cool? A new eyewear company called Cheeterz Club thinks so. The startup is working to change the perception of reading glasses from being just cheap, disposable items you pick up from a rotating display rack at your local drug store to being something you’d actually be proud to wear. To do so, the company is designing its glasses with quality lenses and frames in a range of styles, while still keeping the pricing affordable.
The startup — whose name is a reference to the slang term for glasses, “cheaters” — was founded by Jennifer Farrelly, whose background includes work in advertising and sales at companies like Uber and Virool.
She said the idea to make a better set of readers came to her because she found herself frustrated by the current options on the market.
“It all started a few years ago. My friends were posting on social media these really depressing comments and posts like: ‘I’m old and turning into my parents, this is awful.’ And I [thought to myself] why does it have to be like that? I feel just as young today as I did 10 years ago,” Farrelly explains. “Why are my friends and I feeling forced to feel old because of something that happens overnight?,” she says, of what felt like the sudden onset of middle age and the hardships it brings.
What’s worse, Farrelly says, is that when you finally make your way to the drugstore to pick out some reading glasses, all you’ll find are bad, plastic pairs that both look and feel cheap.
“That’s even more demoralizing,” she adds.
Image Credits: Cheeterz Club
So Farrelly teamed up with a former Warby Parker and Pair Eyewear head of Product, Lee Zaro, to design a new line of more fashion-forward eyewear.
Zaro, who is based in the LA area, immediately saw the opportunity.
“Drugstore reading glasses are typically poor in quality, and can feel like they are designed with our parents in mind, leaving a huge unmet need for sophisticated eyewear options,” he said. “When Jennifer approached me to help design her first line of eyewear, I knew it was a brilliant idea.”
To differentiate itself from lower-end readers, Cheeterz Club glasses are made with 100% acetate and feature spring hinges and stainless steel. The lenses, meanwhile, offer more clarity than is often found in reading glasses.
Image Credits: Cheeterz Club
Typically, ophthalmic plastic lens materials have an Abbe value — a measure of the degree at which light is dispersed or separated — between 30 and 58. The higher number offers better optical performance. Crown glass can have an Abbe value as high as 59, but polycarbonate readers (like those from Warby Parker, Farrelly notes) would have an Abbe value of 30. Cheeterz Club lenses, which are CR-39 lenses, are at at 58. This is a difference you can tell when trying the glasses on alongside your drugstore readers.
Cheeterz’ lenses also offer 100% UVA/UVB protection, and are oil and water repellent. They can optionally be bought in one of eight fashion tints, from pink to blue, or in two sun shades. Consumers can also opt to add Blue Light coating to help with screen-induced eye fatigue or they can choose Progressive lenses, which combine distance vision with a reading lens.
Tints are an extra $10, Blue Light protection is $25 and Progressive lenses are $40.99 — lower than market rates.
At launch, Cheeterz Club offers 42 different styles ranging from traditional to the more modern, starting at $28.99.
Farrelly says finding the right price was key, because unlike regular glasses, consumers often buy multiple pairs of readers to leave around the house or car, pack in purses and bags, and so on.
“If I break something that costs me a couple hundred dollars, I’d be really upset about it,” she says. “But at a drugstore price of under $30, I can have them in all sorts of colors and different tints.”
For Farrelly, making the startup a success goes beyond bringing higher-quality reading glasses to market. It’s also about serving a demographic that often gets overlooked.
“Founders in their forties do not get representation, and it’s unfortunate. And there are also people in their forties and fifties that have disposable income and are looking for cute things. They’re spending so much money on facial creams and Botox,” she says, “but then you’re forced to put this really ugly pair of glasses on your face that make you feel bad about yourself.”
While Cheeterz Club today is selling direct to the consumer, the company is talking to eye doctors, boutiques and others who may eventually resell for them, as more of a B2B model. It’s also testing selling on Amazon with one pair of Blue Light glasses.
Cheeterz Club plans to start discussing fundraising with seed investors later this fall.
Update, 8/31/21, 5:30 PM ET: Cheeterz Club incorrectly shared the number of frames available at launch. An earlier version of this article said it was 14, it’s actually 42, they said. We’ve updated with the new information.
Heroes, one of the new wave of startups aiming to build big e-commerce businesses by buying up smaller third-party merchants on Amazon’s Marketplace, has raised another big round of funding to double down on that strategy. The London startup has picked up $200 million, money that it will mainly be using to snap up more merchants. Existing brands in its portfolio cover categories like babies, pets, sports, personal health and home and garden categories — some of them, like PremiumCare dog chews, the Onco baby car mirror, gardening tool brand Davaon and wooden foot massager roller Theraflow, category best-sellers — and the plan is to continue building up all of these verticals.
Crayhill Capital Management, a fund based out of New York, is providing the funding, and Riccardo Bruni — who co-founded the company with twin brother Alessio and third brother Giancarlo — said that the bulk of it will be going toward making acquisitions, and is therefore coming in the form of debt.
Raising debt rather than equity at this point is pretty standard for companies like Heroes. Heroes itself is pretty young: it launched less than a year ago, in November 2020, with $65 million in funding, a round comprised of both equity and debt. Other investors in the startup include 360 Capital, Fuel Ventures and Upper 90.
Heroes is playing in what is rapidly becoming a very crowded field. Not only are there tens of thousands of businesses leveraging Amazon’s extensive fulfillment network to sell goods on the e-commerce giant’s marketplace, but some days it seems we are also rapidly approaching a state of nearly as many startups launching to consolidate these third-party sellers.
Many a roll-up play follows a similar playbook, which goes like this: Amazon provides the marketplace to sell goods to consumers, and the infrastructure to fulfill those orders, by way of Fulfillment By Amazon and its Prime service. Meanwhile, the roll-up business — in this case Heroes — buys up a number of the stronger companies leveraging FBA and the marketplace. Then, by consolidating them into a single tech platform that they have built, Heroes creates better economies of scale around better and more efficient supply chains, sharper machine learning and marketing and data analytics technology, and new growth strategies.
What is notable about Heroes, though — apart from the fact that it’s the first roll-up player to come out of the U.K., and continues to be one of the bigger players in Europe — is that it doesn’t believe that the technology plays as important a role as having a solid relationship with the companies it’s targeting, key given that now the top marketplace sellers are likely being feted by a number of companies as acquisition targets.
“The tech is very important,” said Alessio in an interview. “It helps us build robust processes that tie all the systems together across multiple brands and marketplaces. But what we have is very different from a SaaS business. We are not building an app, and tech is not the core of what we do. From the acquisitions side, we believe that human interactions ultimately win. We don’t think tech can replace a strong acquisition process.”
Image Credits: Heroes
Heroes’ three founder-brothers (two of them, Riccardo and Alessio, pictured above) have worked across a number of investment, finance and operational roles (the CVs include Merrill Lynch, EQT Ventures, Perella Weinberg Partners, Lazada, Nomura and Liberty Global) and they say there have been strong signs so far of its strategy working: of the brands that it has acquired since launching in November, they claim business (sales) has grown five-fold.
Collectively, the roll-up startups are raising hundreds of millions of dollars to fuel these efforts. Other recent hopefuls that have announced funding this year include Suma Brands ($150 million); Elevate Brands ($250 million); Perch ($775 million); factory14 ($200 million); Thrasio (currently probably the biggest of them all in terms of reach and money raised and ambitions), Heyday, The Razor Group, Branded, SellerX, Berlin Brands Group (X2), Benitago, Latin America’s Valoreo and Rainforest and Una Brands out of Asia.
The picture that is emerging across many of these operations is that many of these companies, Heroes included, do not try to make their particular approaches particularly more distinctive than those of their competitors, simply because — with nearly 10 million third-party sellers today on Amazon globally — the opportunity is likely big enough for all of them, and more, not least because of current market dynamics.
“It’s no secret that we were inspired by Thrasio and others,” Riccardo said. “Combined with COVID-19, there has been a massive acceleration of e-commerce across the continent.” It was that, plus the realization that the three brothers had the right e-commerce, fundraising and investment skills between them, that made them see what was a ‘perfect storm’ to tackle the opportunity, he continued. “So that is why we jumped into it.”
In the case of Heroes, while the majority of the funding will be used for acquisitions, it’s also planning to double headcount from its current 70 employees before the end of this year with a focus on operational experts to help run their acquired businesses.
Stonehenge Technology Labs wants consumer packaged goods companies to gain meaningful use from all of the data they collect. It announced $2 million in seed funding for its STOPWATCH commerce enhancement software.
The round was led by Irish Angels, with participation from Bread and Butter Ventures, Gaingels, Angeles Investors, Bonfire Ventures and Red Tail Venture Capital.
CEO Meagan Kinmonth Bowman founded the Arkansas-based company in 2019 after working at Hallmark, where she was tasked with the digital transformation of the company.
“This was not a consequence of them not being good marketers or connected to mom, but they didn’t have the technology to connect their back end with retailers like Amazon, Walmart or Hobby Lobby,” she told TechCrunch. “There are so many smart people building products to connect with consumers. The challenge is the big guys are doing things the same way and not thinking like the 13-year-olds on social media that are actually winning the space.”
Kinmonth Bowman and her team recognized that there was a missing middle layer connecting the world of dotcom with brick and mortar. If the middle layer could be applied to the enterprise resource plans and integrate public and private data feeds, a company could be just as profitable online as it could be in traditional retail, she said.
Stonehenge’s answer to that is STOPWATCH, which takes in over 100 million rows of data per workspace per day, analyzes the data points, adds real-time alerts and provides the right data to the right people at the right time.
Dan Rossignol, a B2B SaaS investor, said the CPG world is also about consumerizing our life, and the global pandemic showed that even at home, people could have a productive day and business. Rossignol likes to invest in underestimated founders and saw in Stonehenge a company that is getting CPGs out from underneath antiquated technologies.
“What Meagan and her team are doing is really interesting,” he added. “At this stage, it is all about the people, and the ability to bet on doing something larger.”
Kinmonth Bowman said she had the opportunity to base the company in Silicon Valley, but chose Bentonville, Arkansas instead to be closer to the more than 1,000 CPG companies based there that she felt were the prime customer base for STOPWATCH.
The platform was originally created as a subsidiary of a consulting company, but in 2018, one of their clients told them they just wanted the software rather than also paying for the consulting piece. The business was split, and Stonehenge went underground for eight months to make a software product specifically for the client.
Kinmonth Bowman admits the technology itself is not that sexy — it is using exact transfer loads to extract data from hundreds of systems into a “lake house,” and then siloing it by retailer and other factors and then presenting the data in different ways. For example, the CEO will want different metrics than product teams.
Over the past year, the company has doubled its revenue and also doubled the amount of contracts. It already counts multiple Fortune 100 companies and emerging brands as some of its early users and plans to use the new funding to hire a sales team and go after some strategic relationships.
Stonehenge is also working on putting together a diverse workforce that mimics the users of the software, Kinmonth Bowman said. One of the challenges has been to get unique talent to move to Arkansas, but she said it is one she is eager to take on.
Meanwhile, Brett Brohl, managing partner at Bread and Butter Ventures, said the Stonehenge team “is just crazy enough, smart and driven” to build something great.
“All of the biggest companies have been around for a long time, but not a lot of large organizations have done a good job digitizing their businesses,” he said. “Even pre-COVID, they were building fill-in-the-blank digital transformations, but COVID accelerated technology and hit a lot of companies in the face. That was made more obvious to end consumers, which puts more pressure on companies to understand the need, which is good for STOPWATCH. It went from paper to Excel spreadsheets to the next cloud modification. The time is right for the next leap and how to use data.”
As Synder’s two co-founders Michael Astreiko and Ilya Kisel wrap up their time at Y Combinator, they also announced their seed round of $2 million from TMT Investments.
Though the round was acquired before going into the accelerator program, the Belarus-based pair wanted to wait to publicly share the milestone. As they focus their sights on their next journey of growth and expansion, the new funding will go toward attracting more clients, visibility and sales.
The company bills itself as an easy accounting platform for e-commerce businesses. It was originally founded as CloudBusiness in 2016 and developed accounting automation and management of business finances for small and mid-size businesses.
Astreiko and Kisel started Synder, in 2018 and a year later focused on the company full-time to develop an easy way for commerce companies to shift to omnichannel sales, something Astreiko told TechCrunch can be “a huge pain” due to the complexity of different payment systems and high fees.
“There are a lot of solutions on the market, but you still have to have special knowledge to operate within accounting or commerce,” Kisel said. “For us, the simplicity means that it is worth it if you can have access in several clicks to consolidated inventory, profits and liabilities. Small businesses sometimes are not sharing this information due to competition, but if something is working and easy, they will definitely share it.”
Synder does the heavy lifting for companies by connecting sales channels like Amazon, Shopify, eBay and Etsy into one platform that users can manage with one-click operations. It also created a way to help the accounting stream so that all of the different payment methods can still be used, Kisel said.
The company is already working with 4,000 clients, and will now be fast-tracking their expansion, but will need the right people on board to help the company grow, Astreiko said.
Igor Shoifot, a partner at TMT Investments, said he will join Synder’s board after the company graduates from YC. He likes the simplicity of what the company is doing.
“Often the best solutions are economical, succinct and elegant — you can be onboarded in 10 minutes,” he added. “There is really nobody that really provides a similar solution that was that easy or didn’t require downloading or installing something. I also like their focus on growth, the fact they have no burn and they are making money.”
Synder’s business model is a subscription SaaS model that starts off as a free trial, and users can purchase additional services inside the platform to fit small and large companies.
Its more than 15 employees are spread around Europe, and the company just started hiring in the areas of marketing and sales in the U.S.
Porsche Cars North America has added its entire U.S. inventory of new cars to its online marketplace as the company seeks to keep up with customer demands and the industry’s shift to digital commerce.
When the online marketplace Porsche Finder launched in May 2020, customers were only able to search for pre-owned and certified pre-owned vehicles using the tool. That platform, which lets customers search by vehicle model and generation as well as price, equipment, packages and colors, now includes all new vehicle inventory from its 193 U.S. dealerships.
The platform, which was developed by automaker’s Porsche Digital subsidiary and PCNA, also includes features that let customers estimate a trade-in value and a payment calculator to compare leasing and financing options from Porsche Financial Services.
Online platforms that allow customers to search for products are not new. As customers shift their shopping to online — a trend that accelerated during the COVID-19 pandemic — digital platforms have become a critical tool for companies.
Established automakers like Porsche, however, have had to balance the demand of its customers and dealership network. Porsche doesn’t have a direct sales model like Tesla and new entrants Lucid Group and Rivian.
“The dealership is still at the center of everything we do,” PCNA President and CEO Kjell Gruner said in a recent interview. “At the dealership, we believe very much in personal interaction — in looking somebody in the eye, reading their body language. And, of course, our products are very physical.”
While all 193 dealers are participating in the Porsche Finder tool, Gruner acknowledged that this large group includes those who have been more cautious about the move toward digital commerce.
“You always have some more innovative people, some more cautious,” he said. “COVID … really prompted a willingness to go digital and to use those tools for their own advantage.”
Tuna, which means “fine tune” in Portuguese, is on a mission to “fine tune” the payments space in Latin America and has raised two seed rounds totaling $3 million, led by Canary and by Atlantico.
Alex Tabor, Paul Ascher and Juan Pascual met each other on the engineering team of Peixe Urbano, a company Tabor co-founded and he referred to as a “Groupon for Brazil.” While there, they came up with a way to use A/B testing to create a way of dealing with payments in different markets.
They eventually left Peixe Urbano and started Tuna in 2019 to make their own payment product which enables merchants to use A/B testing of credit card processors and anti-fraud providers to optimize their payments processing with one integration and a no-code interface.
Tabor explained that the e-commerce landscape in Latin America was consolidated, meaning few banks controlled more of the market. The address verification system merchants use to verify a purchaser is who they say they are, involves sending information to a bank that is returned to the merchant with a score of whether that match is legitimate.
“In the U.S., that score is used to determine if the purchaser is legit, but they didn’t implement that in Latin America,” he added. “Instead, merchants in Latam have to tap into other organizations that have that data.”
That process involves manual analysis and constant adjusting due to fraud. Instead, Tuna’s A/B tests between processors and anti-fraud providers in real time and provides a guarantee that a decision to swap providers is based on objective data that considers all components of performance, like approval rates, and not just fees.
Over the past year, the company added 12 customers and saw its revenue increase 15%. It boasts a customer list that includes the large Brazilian fashion chain Riachuelo, and its platform integrates with others including VTEX, Magento and WooCommerce.
The share of e-commerce in overall retail is less than 10 percent in Latin America. Marcos Toledo, Canary’s managing partner, said via email that e-commerce in Latam is currently at an inflexion point: not only has the global pandemic driven more online purchases, but also fintech innovation that has occurred in recent years.
In Brazil alone, e-commerce sales grew 73.88% in 2020, but Toledo said there was much room for improvement. What Tuna is building will help companies navigate the situation and make it easier for more customers to buy online.
Toledo met the Tuna team from his partner, Julio Vasconcellos, who was one of the co-founders of Peixe Urbano. When the firm heard that the other Tuna co-founders were starting a business that was applying some of the optimization methods they had created at Peixe Urbano, but for every company, they saw it as an opportunity to get involved.
“The vast tech expertise that Alex, Paul and Juan bring to a very technical business is something that we really admire, as well as their vision to create a solution that can impact companies throughout Latin America,” Toledo said. “The no-code solution that Tuna is building is exciting because it is scalable and can help companies not only get better margins, but also drive their developers to other efforts — and developers have been a very scarce workforce in the region.”
To meet demand for an e-commerce industry that surpassed $200 billion in 2020, Tuna plans to use the new funding to build out its team and grow outbound customer success and R&D, Tabor said.
Up next, he wants to be able to show traction in payments optimization and facilitators in Brazil before moving on to other countries. He has identified Mexico, Colombia and Argentina as potential new markets.
Michael Chernow is already known as a restaurateur, chef, television host and entrepreneur, but now he can also add lifestyle and wellness guru to that list.
Chernow raised $2.2 million to launch Kreatures of Habit, a lifestyle and wellness brand, with the goal of helping people establish healthy habits.
Seasoned entrepreneur and investor Gary Vaynerchuk led the funding round and was joined by a group of entrepreneurs, media executives and professional sports figures, including Sports 1 Marketing co-founder David Meltzer, Elevator Studio founder Dan Fleyshman, author Dean Graziosi, angel investor Josh Bezoni, author Joel Marion, “Entrepreneurs on Fire” host John Lee Dumas, LA Dodgers player Justin Turner, Philadelphia Eagles general manager Howie Roseman and Evan Yurman.
The idea for Kreatures of Habit stemmed from Chernow’s own life, celebrating 17 years of sobriety. He said he adopted positive habits that enabled him to replace alcohol with nutrition and fitness.
It is the latest venture for Chermow, who also founded The Meatball Shop and Seamore’s in New York. The brand originally started out as a café concept, but Chermow pivoted to the consumer goods space when the global pandemic hit.
“I had put a plan together in 2019, was away for a few weeks when the news of COVID hit,” he told TechCrunch. “I called up my investors and said ‘I am not going to invest in this and neither should you. I’m going to reassess and get back to you.’ However, through my journey of scaling restaurants, I didn’t love doing it because I went from being a culture entrepreneur to a project manager. It was a far cry from connecting to human beings around a brand.”
He started with breakfast — his favorite meal of the day — and began looking at his sustenance of choice: oatmeal, protein and vitamins. Now he is targeting the $3.3 billion pre-packed oats market with his first product, a direct-to-consumer instant oatmeal called The PrOATagonist.
Kreatures of Habit oatmeal. Image Credits: Kreatures of Habit
It is a plant-based, gluten and allergen-free meal that has his three favorite breakfast go-tos — oats, protein and vitamins, plus minerals and Omega-3 fatty acids. Chernow spent over a year testing the formula, which comes in three flavors, including chocolate, blueberry-banana and vanilla.
To help Chernow tap into the industry, he brought on former RX Bar chief marketing officer Victor Lee to lead the brand’s go-to-market strategy. The PrOATagonist comes in a box of seven for $34, and can be obtained via a monthly subscription of $33.
He is also working with one of his investors, Elevator Studios’ Fleyshman, who Chernow referred to as “the best marketer today.”
Fleyshman said he was eager to invest after getting off of a Zoom call with Vaynerchuk.
“The combination of Michael’s resume and passion to build a business with Gary’s passion for building a brand had its advantages as did the cool factor of making a brand with a physical product,” he added. “Gary got 30 people together on the call and almost half had committed within the week.”
In addition to funneling much of the new funding into marketing, it will also be used on product development.
“We have a pipeline of products that will live in the beginning of the day and snack space, several that are in development right now,” Chernow added. “We will always have a capsule collection drop three times a year, a seasonal line and full suite of SKUs over the next three to five years.”
Point Pickup Technologies, a last-mile delivery service, has acquired white label e-commerce platform GrocerKey for $42 million, according to the company. With the acquisition, Point Pickup now allows retailers to offer same-day delivery, from purchase to fulfillment to delivery, under their own brand name, rather than under third parties like Instacart.
Instacart made a killing delivering groceries and goods for retailers during the coronavirus pandemic, with a generated revenue of $1.5 billion in 2020 and $35 billion worth of sales. The company has an estimated 9.6 million active users and over 500,000 “shoppers” who pick up and deliver goods.
New entrants to the same-day delivery space are cropping up, which aligns with the expected growth of the industry to $20.36 billion by 2027, according to Allied Market Research. But companies like Amazon and Instacart that perform this service and host a delivery marketplace get far more than sales revenues – they also get all the customer data.
Tom Fiorita, founder and CEO of Point Pickup, says retailers should have a right to own that data themselves. The acquisition of GrocerKey, which brings on board the company’s front-end consumer-facing sales engine and predictive analytics, puts the data and brand recognition back in the retailer’s hands.
“If you are a customer of Instacart, you pay them a subscription, they own your buying habits, your credit cards, your data,” Fiorita told TechCrunch. “Instacart was a big thing during COVID because no one had delivery. So now retailers woke up and said, ‘Oh my god, I can’t just have an Instacart-like marketplace be selling my goods. I don’t know who my customers are, I don’t have their credit cards or data.’ And you know data runs the world now.”
Another recent, if not smaller, entrant to the space is Canadian startup Tyltgo, which operates under a similar model to what Point Pickup is now offering via GrocerKey’s technology. In both cases, the buyer goes directly onto the merchant’s platform and places the order through them, so it feels like they’re interacting with the brand they purchased from. And on Tuesday, Walmart also announced a new white-label delivery service that would allow other merchants to tap into its own delivery platform to get orders to their customers.
Fiorita founded Point Pickup in 2015 as a reaction to Amazon’s increased omnipotence with the noble, if not naive, mission to “save local America.” Walmart and Kroger, two of the largest grocery retailers in the U.S., are Point Pickup’s top customers, alongside other nationwide retailers like Albertsons, Giant Eagle and more. But Fiorita believes the service his company is offering will be even more impactful when it starts to work its way down to the mid-sized and small- to medium-sized businesses.
“We built this not only to survive against Amazon or Instacart, but because these small businesses need this for their survival,” Fiorita said. “These companies will no longer survive if they continue to allow other companies to sell their merchandise and to own their customer, including the data, the advertising, the CPG dollars and everything.”
Point Pickup offers deliveries of everything from grocery to general merchandise, pharmacy and oversized delivery. It has a network of 350,000 gig economy drivers across 25,000 ZIP codes in all 50 states.
Since the company’s network of drivers, who often pick and pack the products for the customer as well as deliver the goods, comprises all gig workers with their own vehicles, Point Pickup doesn’t have a clear picture of the percentage of its fleet that’s electric or hybrid. Fiorita speculates it’s probably on par with nationwide rates, if not higher. A recent Pew Research report found that 7% of Americans say they own an EV or hybrid.
Fiorita said that the type of car drivers own is taken into account during recruitment and that the company is looking for ways to incentivize drivers to buy less polluting vehicles. He also said Point Pickup is a vehicle-agnostic platform, meaning it’s piloting other delivery vessels like drones and autonomous robots.
To compete with the big dogs in the space like Amazon and Walmart, both of which are either testing or already have in place electric delivery vans, Point Pickup will have to also make efforts to beef up its strategy in the carbon emissions space.
Marketing automation has usually focused on driving sales, mainly using past purchase or late funnel behavior (e.g., paid search) as a predictor of an imminent purchase. While effective at boosting sales numbers, this widely implemented strategy can result in a disservice to brands and industries that adopt it, as it promotes the perpetual devaluation of goods or services. Narrowing a brand’s focus only to aspects linked to conversions risks stripping the customer experience of key components that lay the groundwork for long-term success.
We live in a world rich with data, and insights are growing more vibrant every day. With this in mind, companies and advertisers can strategically weave together all the data they collect during the customer experience. This enables them to understand every inference available during customer interactions and learn what benefits the customer most at a given time.
But focusing exclusively on data collected from customers, brands risk falling subject to the law of diminishing returns. Even companies with meaningful consumer interactions or rich service offerings struggle to gain impactful contextual insights. Only by harnessing a broader dataset can we understand how people become customers in the first place, what makes them more or less likely to purchase again and how developments in society impact the growth or struggle a brand will experience.
Here’s a look at how we can achieve a more complete picture of current and future customers.
A critical component in re-imagining customer experience as a relationship is recognizing that brands often don’t focus enough on consumers’ wider needs and concerns.
Over the past several years, almost every industry has capitalized on the opportunity data-driven marketing presents, inching closer to the “holy grail” of real-time, direct and personalized engagements. Yet, the evolving toolset encouraged brands to focus on end-of-the-funnel initiatives, jeopardizing what really impacts a business’ longevity: relationships.
While past purchase or late-funnel behavior data does provide value and is useful in identifying habit changes or actual needs, it is relatively surface level and doesn’t offer insight into consumers’ future behavior or what led them to a specific purchase in the first place.
By incorporating AI, brands can successfully engage with their audiences in a more holistic, helpful and genuine way. Technologies to discern not just the content of language (e.g., the keywords) but its meaning as well, open up possibilities to better infer consumer interest and intentions. In turn, brands can tune consumer interactions to generate satisfaction and delight, and ultimately accrue stronger insights for future use.