OrderGroove nabs $20M to help brands raise their Amazon game

OrderGroove, a company that helps retailers and brands to sell online by building tools for them to use that are similar to those used by online marketplace Amazon, has raised another $20 million in funding to expand its business.

Originally focused on subscription commerce, OrderGroove’s CEO and founder Greg Alvo said the company is looking for the next frontier for frictionless commerce. It is seriously looking at bots; gauging the effectiveness of instant-ordering Dash-style services; weighing up voice interfaces and even having “intense discussions” about how to use Prime Now as a template — all for retailers and brands to keep their own direct relationships with customers and grow their sales.

“We’re moving beyond subscriptions into other forms of frictionless technology,” Alvo said. “We want to know Ingrid better than she knows herself.” (I’m apparently a proxy for every consumer.)

This round, a Series C, is notable not just because it will mark a new phase for what the company is developing for customers, but also because of who is involved.

It comes from National Securities, which has also made growth investments in Lyft, Palantir and Coursera. It brings the total raised by OrderGroove to $37 million, with previous backers including Lerer Hippeau Ventures, SWaN & Legend Ventures, Western Technology Investment, Silicon Valley Bank, FYRFLY Ventures and Scott Booth, the founder of Alibaba backer Lead Edge Capital. Booth has also joined the board of OrderGroove.

Since being founded in 2010, OrderGroove has found a willing audience of hundreds of brands and retailers to become its paying customers of its SaaS-based subscription services. No surprise there: one of the most regularly recurring themes in the world of commerce today, both online and offline, is how to compete effectively against Amazon and keep it from taking full ownership of your customers.

“Amazon is terrifying for many companies,” Alvo said. “And it’s now getting into private labels for consumer packaged goods and more. Acquiring all the customer data and information that it has, Amazon can now easily switch over to its own brands and take your customers with them.”

That defensive position has netted OrderGroove a number of large brands, including Walmart, Toys R’ Us, PetSmart, Nestlé, L’Oréal and GNC.

OrderGroove initially focused on subscription commerce — building SaaS solutions for companies to “set it and forget it” in Alvo’s words. That is, set up and get recurring payments for regular products and services.

But Amazon has been itself focused on “how to kill the shopping cart” — which can be abandoned even in the sticky Amazon universe. And so, Amazon has had an infusion of tech in recent times to boost how it sells to users — from the growth and success of the Amazon Prime membership service; through to the Echo and the Dash buttons respectively for one-touch and voice-enabled ordering.

All this means that today, the challenge for brands (and OrderGroove) is which of these could prove to be effective routes outside for brands to use directly.

“We’ve tested a number of services to see how they resonate with consumers, and we’re still in the early stages of this. We’re not yet married one specific technology,” Alvo said.

In terms of what might be launched by OrderGroove the soonest, it sounds like bots are in the lead at the moment. “There is a lot of momentum around chatbots, which can provide a level of personalised service and potential know a consumer better than he knows himself.”

Interestingly, in its bid to out-Amazon Amazon, OrderGroove is mainly a commerce rather than data play: it keeps data for each customer in silos, and anonymises it for its own purposes but doesn’t use it across those silos to improve targeting. Nor does OrderGroove ever get data from outside of the transactions that happen on its own platform. That could be something that OrderGroove choose to change in the future, Alvo said.

OrderGroove is not disclosing its valuation in this round.