E-commerce is booming, but over the years it’s becoming increasingly clear that the companies able to capitalize on this trend — and contribute to this growth — are those with the ability to grab the right technology to find your way around the room. Today, salsifyone of the startups developing e-commerce solutions for this purpose announces a big round of $200 million, a sum that speaks both for the demand in the market and for its success to date.
“It was very busy,” CEO and co-founder Jason Purcell said in an interview with TechCrunch. “What drove us first and foremost was the idea that multichannel retail was going to be big and over the past two years Covid has made that trend ambiguous. We have doubled.”
Salsify’s platform caters to retailers, brands, and the various partners they work with to access centralized inventory and product information, data that can in turn be used to enable more consistent experiences wherever those products are sold. (The preferred term to describe this is the “digital shelf,” a point of reference, I think, for the many companies it partners with and their giant legacy companies that sell CPG goods on physical shelves.)
In 2021, ARR rose to $110 million and the company now has 1,200 customers, up from 800 when I last spoke to them in 2020. The list includes big names like Coca-Cola, Libbey, KraftHeinz, Columbia and Mars.
This is a Series F and values salsify (named after the common wildflower) at $2 billion. That’s a notable jump given that the company didn’t disclose a number when surveying its Series E, a $155 million round in 2020 (PitchBook however, puts it at $805 million and previously at $308 million in 2018). This latest round is led by TPG, which also includes Permira’s Growth Opportunities Fund, Neuberger Berman Funds and Cap Table Coalition. It has now raised more than $450 million.
In a venture market very active for ecommerce technology – just today, another startup startup, UK’s contentious, which develops technology to help brands manage commerce across multiple platforms – announced $18 million in funding; last week another company in a similar field, products to the topannounced $70 million in funding – this round and valuation make Salsify one of the biggest contenders in this space.
And it’s likely one that’s catching the attention of even larger companies looking to consolidate, though for now Salsify is focused on being the consolidator itself. Salsify, based in the USA (headquartered in Boston), was acquired last year SKUvantage and alkaemic to expand to Australia and France respectively.
“Big brands want to operate at scale, and that allows us to expand into new geographies,” Purcell said. It also has offices in Portugal and the UK. Purcell says some of the funding will be used to expand further into additional markets.
The challenge Salsify is taking on is a pretty big one, and it’s only gotten bigger as e-commerce has grown. From the basic building blocks of retail like inventory management to payments and logistics, how e-commerce works is still too fragmented and complex. On the other hand, the most savvy companies use technology that gives them a head start in tackling all of this, with Amazon being perhaps the prime example of this.
There have been dozens, probably hundreds, of tech companies that were built around the concept of providing the world’s non-Amazons with tools to help them compete with and make better use of Amazon. Salsify’s approach was to approach the problem as “Experience Management” (which it shortens to XM and appends to each of its various product lines) and to look at it broadly, in terms of not only applying to brands but retailers as well and the various companies working in this complex supply chain, who need all the information to do their job, but may also be able to provide important insights (e.g. regarding inventory levels) to improve how the larger process works .
This platform and broader integration functionality also speaks to how big brands have recognized that they need to function in modern times – gone are the days when their legacy supplier relationships and physical distribution channels were enough to compete with newly emerging D2C competitors leveraging new ones Platforms like social media apps and influencers to connect with new consumers.
This is also the reason why investors have flocked to the company. Purcell described this latest round as “opportunistic” as the company still had capital in the bank from its previous round but was approached by investors interested in working with the company.
“As consumer behavior increasingly shifts toward digital and omnichannel, the way brands think about their technology strategy and how they evolve their tech stack has changed,” said Arun Agarwal, MD at TPG, in a statement. “Through its integrated platform salsify optimizes the shopping experience for brands, retailers and distributors, fosters interaction with consumers and enables consistency, simplicity and agility. TPG has a strong track record of supporting leading SaaS companies and we look forward to partnering with Jason and his team to further that salsifyContinue driving growth and market leadership.”
Salsify secures $200M as the boom in e-commerce catapults its valuation to $2B – TechCrunch Source link Salsify secures $200M as the boom in e-commerce catapults its valuation to $2B – TechCrunch