E-commerce platform Bigcommerce announced today that it has raised $50 million in Series D funding, led by SoftBank Capital, with participation from Telstra Ventures, American Express, and returning investors General Catalyst and Revolution Growth. The capital will be used to develop the technology behind Bigcommerce’s cloud-based platform, further sales and marketing initiatives, and expand into new markets.
Its latest round of funding brings Bigcommerce’s total raised so far to $125 million. The company is not disclosing its current valuation.
As part of the investment, SoftBank Capital partner Steve Murray will join Bigcommerce’s board. SoftBank Capital is the investment arm of SoftBank Corp, the Japanese telecom giant that owns about a third of Alibaba Group, making it the Chinese e-commerce giant’s largest shareholder. This is not the first connection between Bigcommerce and Alibaba. Last month, Bigcommerce integrated Alibaba.com, the business-to-business trading marketplace, into its platform, which means its vendors can source products directly from Alibaba.com wholesalers through Bigcommerce’s site.
Eddie Machaalani, Bigcommerce’s co-founder and CEO, says having SoftBank represented on its board will help the company grow in Asia, one of its main target markets. Currently, 70 percent of its vendors are based in the U.S.
“We’re really excited about Steve Murray. The Asia component is on board. Now we that we have a very strong U.S. presence, the question is what can we do to solidify our ability to expand internationally as well. We think we can learn a lot from Alibaba. It is phenomenal, the fastest-growing company on the planet, and we can help them grow as well,” says Machaalani.
Bigcommerce’s two other new investors, Telstra Ventures and American Express, will help it expand its presence in Australia and the U.S., respectively. American Express and Bigcommerce can partner on promotions like the credit card company’s Small Business Saturday, which encourages card holders to shop at independently-owned businesses by giving them money back. Telstra Ventures, meanwhile, is a wholly-owned subsidiary of Telstra Corp, the largest telecom in Australia, where Bigcommerce was founded.
Bigcommerce’s platform is currently used by 60,000 vendors and it monetizes through predominantly subscription-based business model. According to the company’s research, e-commerce as a segment of the total worldwide retail market is growing at 30 percent a year and will hit $2 trillion in sales by 2015. Bigcommerce says it has seen “significant year-over-year revenue growth” and its merchants are now closing in on $5 billion in total sales.
The company also claims that its clients see a 24 percent higher gross merchandise volume (GMV) over competing e-commerce platforms, which Machaalani says it has achieved by focusing on helping clients with search engine optimization so their stores show up higher in Google results, as well as integration with social media platforms including Pinterest and Facebook. The company’s software is also designed to scale quickly if a SMB manages to grow to enterprise size, so they don’t have to switch to another e-commerce platform.
Machaalani says that Bigcommerce is hiring more product engineers in San Francisco, on top of the research and development team it already has in Sydney. It plans to add features to its SaaS platform with enterprise-grade analytics that will allow small- to medium-sized businesses that compete with large retailers like Amazon.com do a better job of tracking orders, strengthening security, integrating with social media, and conducting mobile and cross-border transactions.
While Bigcommerce’s chief rivals are other e-commerce platforms (including Magento), Machaalani describes Amazon and eBay as the company’s “frenemies,” because a lot of small vendors use those sites to reach as many customers as possible. The drawback, however, is that businesses can’t build their own brand on Amazon and eBay, since their merchandise is lumped in with other search results for similar products.
Machaalani says there are about 7 million to 10 million retailers in the world who still do not have an online presence, so Bigcommerce’s goal is to leverage its platform to make it easy for stores to go open an e-commerce site. It has struck a partnership with Lightspeed POS and NCR Silver that allows vendors to manage online and offline inventory, and is also a founding developer partner with Poynt, a smart payment terminal that is currently targeting 16 million merchants. Fellow e-commerce platform Magento picked Bigcommerce as its SaaS migration provider after discontinuing its ProStores and the Magento Go platform.
Bigcommerce will also update its user interface to make it easier for new merchants to set up online stores, source products (through partnerships like the one it made with Alibaba.com), process payments, manage returns, and add one-click payments integrated with PayPal and Stripe.