For many people, e-commerce is synonymous with shopping on Amazon, but the reality is that a retailer has the ability 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 to build more ecommerce business management tools, as well as Productsup’s own. traction in the market, where it already has more than 900 brands to its customers, including IKEA, Sephora, Beiersdorf, Redbubble and ALDI.
European company Bregal Milestone leads the round for Berlin-based Productsup, which also includes former lender Nordwind Capital. The company has been around since 2010 and appears to have raised less than $24 million in that time, according to PitchBook data, with Crunchbase estimating 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 MovieUpdates that the valuation was not disclosed with this round, but given how little it has raised in the past 12 years, that is a strong sign that the company is growing well on its own.
The plan now is to raise some funding to accelerate that with more investment in R&D and product development, more global deals and M&A to bring in more functionality and enter new markets. Citing figures from Constellation Research, Peters points out that the total addressable market for providing ecommerce channel management services is $11.4 billion.
“We used to work on technology that was only used by a few people, but since then the P2C category has taken off and we have caused a serious shift in the market. Now that more people understand our message, it’s time to boost growth,” Peters said in an emailed interview. †Our strong numbers support us in this case, as they’ve proven that cadence is increasing, people are talking and customers are adopting our strategy – and we’ve had great results. In the early stages, it was all about proving that our technology worked and was adaptable, and now the market is waking up.”
“With technological advancements like the metaverse on the horizon, these are exciting times for the trading world,” Hollerbach said in a statement. “We are about to enter a new era of innovation, so our priority is to ensure that businesses are equipped to manage the proliferation of retail channels and experiences to become the disruptors – not the disruptors.”
The world of ecommerce is definitely complex and fragmented – you need no more proof than the very existence of thousands of ecommerce companies, not just retailers, but also sales platforms and tools to sell better. But that also means that there are a number of companies that provide 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 slogan “We’re their #1 competitor” linking to rivals: There are so many rivals they’re betting how to top the search results for those doing comparison shopping for e-commerce solutions.
Peters tells me his company’s approach is different and better as it has moved away from the point solution idea and built a platform to manage different aspects of ecommerce marketing and sales from one place.
“Most companies in our space offer patchy solutions. We are the only provider that can enable companies to realize their global potential,” he told me in an email. With Productsup, he said, they can manage this at scale and handle different use cases such as feed management, vendor and supplier onboarding, product content syndication. “We enable companies to implement this globally rather than worrying about individual channels or regions.” Those regional and channel silos are indeed one of the biggest pain points in digital commerce in general, and one reason why marketplaces like Amazon are gaining so much ground, because they are one-stop shops in their own right.
All of this certainly fits with the way many SaaS platform players are positioning their solutions today (away from point solutions is a big theme, for example in cybersecurity and in workplace productivity), but it’s also a busy space. Companies like Shopware, another German player that also picked up a big round earlier this year, and even Salesforce are playing aggressively in this space.
While the Covid-19 pandemic has undoubtedly given a big boost to the world of e-commerce, what’s left is in the wake of that (hopefully!) downturn – and at least a gradual return to 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.
“First, companies are trapped in a state of change, facing commercial anarchy that has accelerated the pandemic,” he said. “Today, brands, retailers and online platforms don’t know whether consumers are on TikTok, Facebook, Instagram or a combination of all three. In addition, after the pandemic, in-store shopping has returned, bringing local inventory ads back to the forefront for businesses trying to reach buyers. The number of channels organizations need to meet customers is growing in both complexity and volume. To succeed in this ever-changing landscape, retailers need a solution that can seamlessly manage these channels.” And that includes all the new platforms that are just around the corner, as inevitably.
Add to this, he said, other issues beyond the simple process of being able to find and buy something online. “Consumers are increasingly concerned about things like sustainability, ethical processes and changing their buying patterns to reflect this,” he said. “Brands that cannot respond to this will suffer.”
The company says ARR has grown more than 60% in the past 12 months, gross revenue retention of 90% and net revenue retention of 120%, although it does not disclose actual numbers.
“Our decision to partner with Productsup was based on the long-term sustainable journey as a business-critical business-level commerce solution,” said Cyrus Shey, managing partner of Bregal Milestone, in a statement. “While alternative vendors tend to offer point solutions, Productsup uniquely addresses the needs of the evolving merchant market for a single view across all product information value chains and provides seamless, end-to-end control of product data – across all global channels and across real time.”