Dec
17
2020
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Spryker raises $130M at a $500M+ valuation to provide B2Bs with agile e-commerce tools

Businesses today feel, more than ever, the imperative to have flexible e-commerce strategies in place, able to connect with would-be customers wherever they might be. That market driver has now led to a significant growth round for a startup that is helping the larger of these businesses, including those targeting the B2B market, build out their digital sales operations with more agile, responsive e-commerce solutions.

Spryker, which provides a full suite of e-commerce tools for businesses — starting with a platform to bring a company’s inventory online, through to tools to analyse and measure how that inventory is selling and where, and then adding voice commerce, subscriptions, click & collect, IoT commerce and other new features and channels to improve the mix — has closed a round of $130 million.

It plans to use the funding to expand its own technology tools, as well as grow internationally. The company makes revenues in the mid-eight figures (so, around $50 million annually) and some 10% of its revenues currently come from the U.S. The plan will be to grow that business as part of its wider expansion, tackling a market for e-commerce software that is estimated to be worth some $7 billion annually.

The Series C was led by TCV — the storied investor that has backed giants like Facebook, Airbnb, Netflix, Spotify and Splunk, as well as interesting, up-and-coming e-commerce “plumbing” startups like Spryker, Relex and more. Previous backers One Peak and Project A Ventures also participated.

We understand that this latest funding values Berlin -based Spryker at more than $500 million.

Spryker today has around 150 customers, global businesses that run the gamut from recognised fashion brands through to companies that, as Boris Lokschin, who co-founded the company with Alexander Graf (the two share the title of co-CEOs) put it, are “hidden champions, leaders and brands you have never heard about doing things like selling silicone isolations for windows.” The roster includes Metro, Aldi Süd, Toyota and many others.

The plan will be to continue to support and grow its wider business building e-commerce tools for all kinds of larger companies, but in particular Spryker plans to use this tranche of funding to double down specifically on the B2B opportunity, building more agile e-commerce storefronts and in some cases also developing marketplaces around that.

One might assume that in the world of e-commerce, consumer-facing companies need to be the most dynamic and responsive, not least because they are facing a mass market and all the whims and competitive forces that might drive users to abandon shopping carts, look for better deals elsewhere or simply get distracted by the latest notification of a TikTok video or direct message.

For consumer-facing businesses, making sure they have the latest adtech, marketing tech and tools to improve discovery and conversion is a must.

It turns out that business-facing businesses are no less immune to their own set of customer distractions and challenges — particularly in the current market, buffeted as it is by the global health pandemic and its economic reverberations. They, too, could benefit from testing out new channels and techniques to attract customers, help them with discovery and more.

“We’ve discovered that the model for success for B2B businesses online is not about different people, and not about money. They just don’t have the tooling,” said Graf. “Those that have proven to be more successful are those that are able to move faster, to test out everything that comes to mind.”

Spryker positions itself as the company to help larger businesses do this, much in the way that smaller merchants have adopted solutions from the likes of Shopify .

In some ways, it almost feels like the case of Walmart versus Amazon playing itself out across multiple verticals, and now in the world of B2B.

“One of our biggest DIY customers [which would have previously served a mainly trade-only clientele] had to build a marketplace because of restrictions in their brick and mortar assortment, and in how it could be accessed,” Lokschin said. “You might ask yourself, who really needs more selection? But there are new providers like Mano Mano and Amazon, both offering millions of products. Older companies then have to become marketplaces themselves to remain competitive.”

It seems that even Spryker itself is not immune from that marketplace trend: Part of the funding will be to develop a technology AppStore, where it can itself offer third-party tools to companies to complement what it provides in terms of e-commerce tools.

“We integrate with hundreds of tech providers, including 30-40 payment providers, all of the essential logistics networks,” Lokschin said.

Spryker is part of that category of e-commerce businesses known as “headless” providers — by which they mean those using the tools do so by way of API-based architecture and other easy-to-integrate modules delivered through a “PaaS” (clould-based Platform as a Service) model.

It is not alone in that category: There have been a number of others playing on the same concept to emerge both in Europe and the U.S. They include Commerce Layer in Italy; another startup out of Germany called Commercetools; and Shogun in the U.S.

Spryker’s argument is that by being a newer company (founded in 2018) it has a more up-to-date stack that puts it ahead of older startups and more incumbent players like SAP and Oracle.

That is part of what attracted TCV and others in this round, which was closed earlier than Spryker had even planned to raise (it was aiming for Q2 of next year) but came on good terms.

“The commerce infrastructure market has been a high priority for TCV over the years. It is a large market that is growing rapidly on the back of e-commerce growth,” said Muz Ashraf, a principal at TCV, to TechCrunch. “We have invested across other areas of the commerce stack, including payments (Mollie, Klarna), underlying infrastructure (Redis Labs) as well as systems of engagement (ExactTarget, Sitecore). Traditional offline vendors are increasingly rethinking their digital commerce strategy, more so given what we are living through, and that further acts as a market accelerant.

“Having tracked Spryker for a while now, we think their solution meets the needs of enterprises who are increasingly looking for modern solutions that allow them to live in a best-of-breed world, future-proofing their commerce offerings and allowing them to provide innovative experiences to their consumers.”

May
14
2020
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Why we’re doubling down on cloud investments right now

Years from now, people will look back on the COVID-19 pandemic as a watershed moment for society and the global economy.

Wearing a mask might be as common as owning a phone; telework, telemedicine and online education will be more of a norm than a backup plan; and for the global economy, the cloud will have transformed the underlying infrastructure of businesses and entire industries.

COVID-19 is a turning point for the cloud and cloud company founders. For its computing power and as a delivery model of software, the cloud has been embraced as a solution to many challenges that businesses face during today’s economic downturn and recovery. Not only is the cloud industry more resilient than other industries, but the cloud model offers businesses a promising future in the age of social distancing and beyond.

We believe that once founders find shelter in the cloud, they’ll never go back.

Cloud’s resiliency amid historic volatility

Over the past decade, there’s been a massive market shift from on-premises to cloud, as 94% of enterprises use at least one cloud service today. 2020 was already a milestone year for the cloud industry, as aggregate SaaS and IaaS run-rate revenue each crossed $100 billion, and the BVP Nasdaq Emerging Cloud Index (^EMCLOUD) market cap crossed $1 trillion in early February. Yet in a matter of days, as the COVID-19 pandemic spread, fear tore through financial markets.

In early March, public markets experienced the steepest crash in history with volatility we haven’t seen since the Great Recession. The cloud index market cap dropped to ~$750 million and cloud multiples returned close to their historical averages of ~7x while the VIX volatility index spiked to the mid-80s. Both at global highs in February 2020, the ^EMCLOUD and the S&P 500 traded off by roughly 35% by mid-March. Over the next two months, though, the ^EMCLOUD recouped those losses, charging to a new all-time high on May 7.

The cloud index has continued its rise since then, and as of the close on May 11 has a market cap above $1.2 trillion and has returned to the lofty 12x forward run rate revenue multiples from 2019. Similar to Adobe in 2012, we expect many enterprises to transition over to the cloud model, and the index will continue to expand. As we predicted in this year’s State of the Cloud 2020, by 2025 we expect the cloud to penetrate 50% of enterprise software.

Dec
05
2019
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Design may be the next entrepreneurial gold rush

Ten years ago, the vast majority of designers were working in Adobe Photoshop, a powerful tool with fine-tuned controls for almost every kind of image manipulation one could imagine. But it was a tool built for an analog world focused on photos, flyers and print magazines; there were no collaborative features, and much more importantly for designers, there were no other options.

Since then, a handful of major players have stepped up to dominate the market alongside the behemoth, including InVision, Sketch, Figma and Canva.

And with the shift in the way designers fit into organizations and the way design fits into business overall, the design ecosystem is following the same path blazed by enterprise SaaS companies in recent years. Undoubtedly, investors are ready to place their bets in design.

But the question still remains over whether the design industry will follow in the footprints of the sales stack — with Salesforce reigning as king and hundreds of much smaller startup subjects serving at its pleasure — or if it will go the way of the marketing stack, where a lively ecosystem of smaller niche players exist under the umbrella of a handful of major, general-use players.

“Deca-billion-dollar SaaS categories aren’t born everyday,” said InVision CEO Clark Valberg . “From my perspective, the majority of investors are still trying to understand the ontology of the space, while remaining sufficiently aware of its current and future economic impact so as to eagerly secure their foothold. The space is new and important enough to create gold-rush momentum, but evolving at a speed to produce the illusion of micro-categorization, which, in many cases, will ultimately fail to pass the test of time and avoid inevitable consolidation.”

I spoke to several notable players in the design space — Sketch CEO Pieter Omvlee, InVision CEO Clark Valberg, Figma CEO Dylan Field, Adobe Product Director Mark Webster, InVision VP and former VP of Design at Twitter Mike Davidson, Sequoia General Partner Andrew Reed and FirstMark Capital General Partner Amish Jani — and asked them what the fierce competition means for the future of the ecosystem.

But let’s first back up.

Past

Sketch launched in 2010, offering the first viable alternative to Photoshop. Made for design and not photo-editing with a specific focus on UI and UX design, Sketch arrived just as the app craze was picking up serious steam.

A year later, InVision landed in the mix. Rather than focus on the tools designers used, it concentrated on the evolution of design within organizations. With designers consolidating from many specialties to overarching positions like product and user experience designers, and with the screen becoming a primary point of contact between every company and its customers, InVision filled the gap of collaboration with its focus on prototypes.

If designs could look and feel like the real thing — without the resources spent by engineering — to allow executives, product leads and others to weigh in, the time it takes to bring a product to market could be cut significantly, and InVision capitalized on this new efficiency.

In 2012, came Canva, a product that focused primarily on non-designers and folks who need to ‘design’ without all the bells and whistles professionals use. The thesis: no matter which department you work in, you still need design, whether it’s for an internal meeting, an external sales deck, or simply a side project you’re working on in your personal time. Canva, like many tech firms these days, has taken its top-of-funnel approach to the enterprise, giving businesses an opportunity to unify non-designers within the org for their various decks and materials.

In 2016, the industry felt two more big shifts. In the first, Adobe woke up, realized it still had to compete and launched Adobe XD, which allowed designers to collaborate amongst themselves and within the organization, not unlike InVision, complete with prototyping capabilities. The second shift was the introduction of a little company called Figma.

Where Sketch innovated on price, focus and usability, and where InVision helped evolve design’s position within an organization, Figma changed the game with straight-up technology. If Github is Google Drive, Figma is Google Docs. Not only does Figma allow organizations to store and share design files, it actually allows multiple designers to work in the same file at one time. Oh, and it’s all on the web.

In 2018, InVision started to move up stream with the launch of Studio, a design tool meant to take on the likes of Adobe and Sketch and, yes, Figma.

Present

When it comes to design tools in 2019, we have an embarrassment of riches, but the success of these players can’t be fully credited to the products themselves.

A shift in the way businesses think about digital presence has been underway since the early 2000s. In the not-too-distant past, not every company had a website and many that did offered a very basic site without much utility.

In short, designers were needed and valued at digital-first businesses and consumer-facing companies moving toward e-commerce, but very early-stage digital products, or incumbents in traditional industries had a free pass to focus on issues other than design. Remember the original MySpace? Here’s what Amazon looked like when it launched.

In the not-too-distant past, the aesthetic bar for internet design was very, very low. That’s no longer the case.

Nov
20
2019
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Reimagine inside sales to ramp up B2B customer acquisition

Slack makes customer acquisition look easy.

The day we acquired our first Highspot customer, it was raining hard in Seattle. I was on my way to a startup event when I answered my cell phone and our prospect said, “We’re going with Highspot.” Relief, then excitement, hit me harder than the downpour outside. It was a milestone moment – one that came after a long journey of establishing product-market fit, developing a sustainable competitive advantage, and iterating repeatedly based on prospect feedback. In other words, it was anything but easy.

User-first products are driving rapid company growth in an era where individuals discover, adopt, and share software they like throughout their organizations. This is great if you’re a Slack, Shopify, or Dropbox, but what if your company doesn’t fit that profile?

Product-led growth is a strategy that works for the right technologies, but it’s not the end-all, be-all for B2B customer acquisition. For sophisticated enterprise software platforms designed to drive company-wide value, such as Marketo, ServiceNow and Workday, that value is realized when the product is adopted en masse by one or more large segments.

If you’re selling broad account value, rather than individual user or team value, acquisition boils down to two things: elevating account based-selling and revolutionizing the inside sales model. Done correctly, you lay a foundation capable of doubling revenue growth year-over-year, 95 percent company-wide retention, and more than 100 percent growth in new customer logos annually. Here are the steps you can take to build a model that realizes on-par results.

Work the account, not the deal

Account-based selling is not a new concept, but the availability of data today changes the game. Advanced analytics enable teams to develop comprehensive and personalized approaches that meet modern customers’ heightened expectations. And when 77 percent of business buyers feel that technology has significantly changed how companies should interact with them, you have no choice but to deliver.

Despite the multitude of products created to help sellers be more productive and personal, billions of cookie-cutter emails are still flooding the inboxes of a few decision makers. The market is loud. Competition is cut throat. It’s no wonder 40 percent of sales reps say getting a response from a prospect is more difficult than ever before. Even pioneers of sales engagement are recognizing the need for evolution – yesterday’s one-size-fits-all approach to outreach only widens the gap between today’s sellers and buyers.

Companies must radically change their approach to account-based selling by building trusted relationships over time from the first-touch onward. This requires that your entire sales force – from account development representatives to your head of sales – adds tailored, tangible value at every stage of the journey. Modern buyers don’t want to be sold. They want to be advised. But the majority of companies are still missing the mark, favoring spray-and-pray tactics over personalized guidance.

One reason spamming remains prevalent, despite growing awareness of the need for quality over quantity, is that implementing a tailored approach is hard work. However, companies can make great strides by doing just three things:

  • Invest in personalization: Sales reps have quota, and sales leaders carry revenue targets. The pressure is as real as the numbers. But high velocity outreach tactics simply don’t work consistently. New research from Monetate and WBR Research found that 93% of businesses with advanced personalization strategies increased their revenue last year. And while scaling personalization may sound like an oxymoron, we now have artificial intelligence (AI) technology capable of doing just that. Of course, not all AI is created equal, so take the time to discern AI-powered platforms that deliver real value from the imposters. With a little research, you’ll find sales tools that discard  rinse-and-repeat prospecting methods in favor of intelligent guidance and actionable analytics.

Jun
27
2019
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Fellow raises $6.5M to help make managers better at leading teams and people

Managing people is perhaps the most challenging thing most people will have to learn in the course of their professional lives – especially because there’s no one ‘right’ way to do it. But Ottawa-based startup Fellow is hoping to ease the learning curve for new managers, and improve and reinforce the habits of experienced ones with their new people management platform software.

Fellow has raised $6.5 million in seed funding, from investors including Inovia Capital, Felicis Ventures, Garage Capital and a number of angels. The funding announcement comes alongside the announcement of their first customers, including Shopify (disclosure: I worked at Shopify when Fellow was implemented and was an early tester of this product, which is why I can can actually speak to how it works for users).

The Fellow platform is essentially a way to help team leads interact with their reports, and vice versa. It’s a feedback tool that you can use to collect insight on your team from across the company; it includes meeting supplemental suggestions and templates for one-on-ones, and even provides helpful suggestions like recommending you have a one-on-one when you haven’t in a while; and it all lives in the cloud, with integrations for other key workplace software like Slack that help it integrate with your existing flow.

Fellow co-founder and CEO Aydin Mirzaee and his co-founding team have previous experience building companies: They founded Fluidware, a survey software company, in 2008 and then sold it to SurveyMonkey in 2014. In growing the team to over 100 people, Mirzaee says they realized where there were gaps, both in his leadership team’s knowledge and in available solutions on the market.

“Starting the last company, we were in our early 20s, and like the way that we used to learn different practices was by using software, like if you use the Salesforce, and you know nothing about sales, you’ll learn some things about sales,” Mirzaee told me in an interview. “If you don’t know about marketing, use Marketo, and you’ll learn some things about marketing. And you know, from our perspective, as soon as we started actually having some traction and customers and then hired some people, we just got thrown into it. So it was ‘Okay, now, I guess we’re managers.’ And then eventually we became managers of managers.”

Fellow Team Photo 2019

Mirzaee and his team then wondered why a tool like Salesforce or Marketo didn’t exist for management. “Why is it that when you get promoted to become a manager, there isn’t an equivalent tool to help you with that?” he said.

Concept in hand, Fellow set out to build its software, and what it came up with is a smartly designed, user-friendly platform that is accessible to anyone regardless of technical expertise or experience with management practice and training. I can attest to this first-hand, since I was a first-time manager using Fellow to lead a team during my time at Shopify – part of the beta testing process that helped develop the product into something that’s ready for broader release. I was not alone in my relative lack of management knowledge, Mirzaee said, and that’s part of why they saw a clear need for this product.

“The more we did research, the more we figured out that obviously, managers are really important,” he explained. “70% of customer engagements are due to managers, for instance. And when people leave companies, they tend to leave the manager, not the company. The more we dug into it the more it was clear that there truly was this management problem –  management crisis almost, and that nobody really had built a great tool for managers and their teams like.”

Fellow’s tool is flexible enough to work with specific management methodologies like setting SMART goals or OKRs for team members, and managers can use pre-set templates or build their own for things like setting meeting talking points, or gathering feedback from the colleagues of their reports.

Right now, Fellow is live with a number of clients including Shoify, Vidyard, Tulip, North and more, and it’s adding new clients who sign up on a case-by-case basis, but increasing the pace at which it onboard new customers. Mirzaee explained that it hopes to open sign ups entirely later this year.

Mar
27
2019
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Before breaking up with Shopify, Mailchimp quietly acqui-hired LemonStand, a Shopify competitor

Here’s an interesting twist on the story from last week about the break-up between Shopify and Mailchimp, after the two said they were at odds over how customer data was shared between the two companies. It turns out that before it parted ways with Shopify, Mailchimp had quietly made an acquisition of LemonStand, one of the e-commerce platform’s smaller competitors, to bring more integrated e-commerce features into its platform.

After news broke of the rift between Mailchimp and Shopify, rumors started to circulate among people in the world of e-commerce about Mailchimp buying Vancouver-based LemonStand, which had announced on March 5 that it was shutting down its service in 90 days, on June 5, without much of an explanation why.

We were tipped off on those rumors, so we contacted Ross Paul, LemonStand’s VP of growth and an investor in the startup, who suggested we contact Mailchimp. (Paul now lists Mailchimp as his employer on his LinkedIn profile.) Mailchimp confirmed the deal, describing it as an acqui-hire, with the team now woking on light e-commerce functionality.

“Mailchimp acqui-hired the team behind LemonStand at the end of February,” Mailchimp said in a statement provided to TechCrunch. It did not provide any financial terms for the deal.

Mailchimp — which is privately held and based in Atlanta — said it made the acquisition to provide more features to its customers, specifically those in e-commerce.

“Mailchimp helps small businesses grow, and our e-commerce customers have been asking us to add more functionality to our platform to help them market more effectively,” the company said in a statement. “The LemonStand team is helping us build out our e-commerce light functionality.”

But Mailchimp is clear to say that its acqui-hire was not related to ending its relationship with Shopify.

“Our decision to discontinue our partnership with Shopify last week is unrelated to LemonStand,” Mailchimp said. “Shopify knew we were working on e-commerce features long before we hired the LemonStand team. In fact, we launched Shoppable Landing Pages last fall in partnership with Square, and Shopify chose not to partner with us on the launch.”

But even if the LemonStand deal is not related to its rift with Shopify, the acquisition of one and the breakup with the other both point to the same thing: the growing role of Mailchimp’s e-commerce business.

The company — which provides email marketing and other marketing services to business — has been slowly building a revenue stream in e-commerce by integrating a number of features into its platform to let its customers, for example, sell items as part of the marketing process. These are less about building full check-out experiences or commerce backends, but for offering, say, one-off sale items as part of a particular promotion or campaign.

Last year, when Mailchimp launched those new shoppable landing pages with Square, it said that 50 percent of its revenues were now coming from e-commerce, with its customers selling more than $22 billion worth of products in the first half of 2018. Mailchimp made some $600 million in revenue in 2018, which — if its 50 percent e-commerce figure remained consistent — meant that it made $300 million last year just from e-commerce-related services.

The Square partnership is instructive in light of this acquisition. While Mailchimp is indeed building some native e-commerce features for its platform, it will continue to work with third parties (if not Shopify, the biggest of them all) to provide other functionality.

“We believe small businesses are best served when they can choose which technology they use to run their businesses, which is why we integrate with more than 150 different apps and platforms including e-commerce platforms,” Mailchimp said in its statement to TechCrunch.

“We’re not trying to become an e-commerce platform or compete directly with companies like Shopify,” it added, “and we think that adding e-commerce features in Mailchimp will help our e-commerce partners. Companies will be able to start their businesses with Mailchimp and have a seamless experience, and eventually use Mailchimp along with one of our e-commerce partners.”

Apr
09
2015
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Google Wallet Adds New Integrations With Shopify, Seamless, Dunkin’ Donuts And More

Screen Shot 2015-04-09 at 14.48.17 Google has been stepping up its game in mobile payments the last several months, buying Softcard’s point-of-sale tech and making some international advances for its money transfer service. Today it’s adding another crucial piece to mix: some key integrations with merchants and merchant platforms. Customers that use Android apps from Dunkin’ Donuts and Seamless… Read More

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