To many people, e-commerce is synonymous with shopping on Amazon, but the reality is that a retailer has the option to use a bundle of different channels to sell and market products — and many do. Today, a startup called Productsup, which has built a platform that helps retailers navigate that landscape, is announcing $70 million in funding — a growth round that underscores both the opportunity for building more e-commerce business management tools, but also Productsup’s own traction in the market, where it already counts more than 900 brands among its customers, including the likes of IKEA, Sephora, Beiersdorf, Redbubble and ALDI.
European firm Bregal Milestone is leading the round for Berlin-based Productsup, with previous backer Nordwind Capital also participating. The company has been around since 2010 and seems to have disclosed less than $24 million raised in that time, according to PitchBook data, while Crunchbase puts the total at $20 million.
Vincent Peters, the CEO (the three co-founders are Johannis Hatt, Kai Seefeldt and chief innovation officer Marcel Hollerbach), told TechCrunch that the valuation was not being disclosed with this round, but given how little it’s raised in the last 12 years, that is a strong sign that the company has been growing well on its own steam.
Now, the plan is to take on some funding to accelerate that with more investments into R&D and product development, more global deals and M&A to bring in more functionality and enter new markets. Peters points out, citing figures from Constellation Research, that its total addressable market for providing e-commerce channel management services is $11.4 billion.
“We’d previously been working on technology only used by a few people, but since then the P2C category has taken flight and we have caused a serious shift within the market. As more people are waking up to our message, it is time to turbo-charge the growth,” Peters said in an emailed interview. “Our strong numbers back us up in this case as they have proven the cadence is picking up, people are talking and customers are adopting our strategy – and we’ve had fantastic results. The early stages were all about proving our technology worked and it was adaptable, and now the market is waking up.”
“With technology advancements like the metaverse on the horizon, these are exciting times for the commerce world,” said Hollerbach in a statement. “We are about to enter a new era of innovation, so it’s our priority to ensure companies are equipped to manage the proliferation of shopping channels and experiences to become the disruptors — not the disrupted.”
The world of e-commerce is definitely complex and fragmented — you need no more proof than the very existence of thousands of e-commerce businesses, not just retailers but platforms for selling and tools to help sell better. But that also means there are a number of companies providing services in the same category as Productsup.
A Google search of the company’s name plus the word “competitor” says it all. The results include other companies with the tagline “We’re their #1 competitor” linking to rivals: there are so many rivals that they’re gaming how to come at the top of the search results for those doing comparative shopping for e-commerce solutions.
Peters tells me that his company’s approach is different, and better, because it’s moving away from the idea of a point solution and has built a platform to manage different aspects of e-commerce marketing and sales from a single place.
“Most companies in our space offer piecemeal solutions. We’re the only provider who can enable companies to realise their global potential,” he told me in an email. Productsup, he said, enables them to manage this at scale and cover different use cases like feed management, seller and vendor onboarding, and product content syndication. “We enable companies to implement this globally instead of having to worry about individual channels or regions.” Those regional and channel siloes are indeed one of the biggest pain points in digital commerce in general, and one reason why marketplaces like Amazon gain so much ground, since they are themselves one-stop shops.
All of that is definitely in keeping with how a lot of SaaS platform players are positioning their solutions today (moving away from point solutions is a big theme, for example, in cybersecurity; and in workplace productivity), but it’s also a crowded space. Companies like Shopware, another German player that also raised a big round earlier this year, and even Salesforce play aggressively in this space.
While the COVID-19 pandemic undoubtedly gave a major boost to the world of e-commerce, what has been left in the wake of that (hopefully!) subsiding — and in any case making some gradual returns away from social distancing and the rest — is “commerce anarchy” in Peters’ words. In other words, even more choices for consumers, and more complexity for those trying to sell to them.
“Firstly, companies are caught in a state of flux, faced with commerce anarchy that the pandemic has accelerated,” he said. “Nowadays, brands, retailers and online platforms don’t know if consumers are on TikTok, Facebook, Instagram or a combination of all three. Additionally, post pandemic, in store shopping has returned, bringing local inventory ads back to the forefront for companies trying to reach shoppers. The number of channels that organisations need to meet customers is growing in both complexity and volume. In order to succeed in this ever-changing landscape, retailers need a solution that can manage these channels seamlessly.” And that will include whatever new platforms are around the corner, as there inevitably are.
Add to this, he said, are other issues that extend beyond the simple process of being able to find and buy something online. “Consumers have become increasingly concerned with issues such as sustainability, ethical processes, and are changing buying patterns to reflect this,” he said. “Brands that cannot cater to this will suffer.”
The company says that ARR grew by over 60% in the last 12 months, gross revenue retention rate of 90% and a net revenue retention rate of 120% — although it’s not disclosing actual figures.
“Our decision to partner with Productsup was based on its long-term, sustainable trajectory as a mission-critical enterprise-grade commerce solution,” said Cyrus Shey, managing partner of Bregal Milestone, in a statement. “Whereas alternative vendors mostly offer point solutions, Productsup uniquely addresses the needs of the evolving commerce market for a single view of all product information value chains and offers seamless, end-to-end product data control – across all global channels and in real-time.”