Fabric, a five-year-old company providing composable API-driven technology for digital commerce, secured $140 million in Series C funding on a $1.5 billion valuation.
The Seattle-based modular and headless commerce company offers more than 300 commerce APIs and associated framework to connect a company’s sales channel to one place and the ability to use the entire commerce platform or individual products.
While similar companies target small businesses, fabric is going after bigger brands that have difficulty creating good online stores, in part because they are running their online commerce via mega, monolithic legacy software that CEO Faisal Masud said “anchors them into draconian platforms.”
“Not that Amazon is much better at merchandising, but they built an API-first platform, notably the first headless one where they can be flexible as the need arises,” he added. “The burden of other brands is their platform. You don’t have to replatform, but you should be peeling off commerce domains in pieces and move to a microservice approach.”
While Masud believes marketplaces like Shopify are great for small businesses, he also thinks it is the wrong platform for anyone else doing business-to-business, over $50 million in gross merchandise value annually or looking for fewer restrictions, flexibility and composability of their sales channel.
SoftBank led the Series C and was joined by Forerunner Ventures, Glynn Capital and existing investors Redpoint Ventures, Norwest Ventures and Stripes, which led the Series B. The new capital gives fabric $293 million in total funding raised to date.
Masud attributes the quick succession in funding rounds to fabric’s “substantial growth,” much of it organic. Since the company’s seed round in 2020, fabric went from two customers to more than 60 today — including new client Honest Co. — and grew its headcount six times during the same period, from 45 to 280.
He explained that the seed round was the last time that fabric drove the investment process. After that, investors were the ones leaning in. This most recent round was the result of “pent up investor interest and growth outperforming the company’s plans again.”
“We met with SoftBank, and they are investing in a big way in commerce,” Masud added. “They believe fabric is in pole position for modular and headless commerce. I feel the timing is important for us. If you look at the market right now, there is a meltdown, but us raising is validation of the product and the team. There is going to be rapid development in this space in the next 12 to 18 months, and we don’t want to be left behind due to capital or product constraints.”
In 2021, fabric experienced 4.5 times year over year revenue growth and launched its scalable commerce platform for B2B, which enables online sales transactions for manufacturing, distribution or wholesale businesses.
The company also rounded out its leadership team, most notably bringing on Karen Brewer, who previously worked at Cisco, as the new chief marketing officer, and Stacy Saal, who previously worked at Amazon, as the new chief operating officer. Masud also teased that a chief revenue officer announcement was coming soon.
Masud plans to deploy the new capital into automation and intelligence to accelerate product development and geographic expansion. He is looking to internationalize fabric’s product and also building native capabilities into APIs and co-pilot apps in areas where he wants to expand, like Europe and the Middle East. Funds will also be invested in additional technology hires and building a robots team around the revenue and sales side.
As part of the investment, Robert Kaplan, investment director at SoftBank Investment Advisers, is joining fabric’s board of directors.
“Retailers need to meet modern consumers wherever they are — whether online, offline, mobile, social, or any future entry point,” Kaplan said in a written statement. “This means merchants of all sizes, and especially mid-market and enterprise, need the right commerce platform to keep pace with evolving trends. We believe that fabric has built the industry’s best API-first modular commerce platform and accompanying commerce applications to give merchants unrivaled power and flexibility, all in a manner that reduces the pain of migrating over from legacy, outdated commerce platforms.”