Tag: e-commerce

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Amazon’s palm-scanning payment tech will now be able to verify ages, too

Amazon One, the retailer’s palm-scanning payment technology, is now gaining new functionality with the addition of age verification services. The company announced today that customers using Amazon One devices will be able to buy adult beverages — like beers at a sports event — just by hovering their palm over the Amazon One device. The first venue to support this feature will be Coors Field, home of the Colorado Rockies MLB team. The technology will roll out to additional venues in the months ahead, Amazon says.

First introduced in 2020, Amazon’s biometric payment technology works by creating a unique palm print for each customer, which Amazon associates with a credit card the customer inserts in the sign-up kiosk upon initial setup, or with a card the customer has configured online in advance. If the customer has an Amazon account, that is also associated with their Amazon One profile information. These palm print images are encrypted and stored in a secure area in the AWS cloud, built for Amazon One, with restricted employee access.

To use the system, customers hold their hand over a reader on the device that identifies multiple aspects of their palm, like lines, ridges, and vein patterns, to make the identification.

By combining customer biometrics with payment card information and Amazon accounts, Amazon has created a tool that could be used to serve highly personalized ads, offers, and recommendations over time, if the company chooses.

In a FAQ, however, Amazon claims it “does not use or sell customer information for advertising, marketing, or any other reasons.”

Amazon has argued that palm reading is a more private form of biometrics because you can’t determine someone’s identity just by looking at their palm images. However, the company isn’t just storing palm images — it’s creating a customer database that matches palm images with other information.

After initially becoming available at Amazon’s own retail locations, like Amazon Go stores and Whole Foods, the Amazon One system has since expanded to various sports stadiums, entertainment venues, convenience stores, and travel retailers like Hudson and CREWS at several U.S. airports, in addition to Panera Bread through a partnership announced in March.

To now make the system capable of identifying someone’s age, customers can opt to update their ID to the Amazon One website. To do so, customers will go to one.amazon.com, upload photos of both the front and back of their government-issued ID, like a driver’s license, then snap a selfie to verify it’s them. Amazon says it doesn’t store these IDs after verification, which is performed by an unnamed ISO 27001–certified identity verification provider — a certification that references an international security standard.

After their age is confirmed, Amazon One customers will be able to purchase their adult beverages without having to pull out their ID from their pocket — they can be ID’d and pay for the drinks with a scan of their palm. When verified, the bartender will see a “21+” message appear on the screen along with the customer’s selfie, which they can then use to match to the customer placing the order. The customer can then scan their palm again to pay for the purchase.

Retailers may appreciate this technology because it could make lines move quicker, upping their potential sales and revenue. But it’s worth remembering that Amazon has not entered this market without secondary goals in mind, beyond simply speeding up checkouts.

The technology has been the subject of privacy concerns since its debut, which already led one early adopter to abandon their plans to use the readers, after receiving pressure from consumer privacy and advocacy groups. Denver Arts and Venues had been planning to leverage Amazon One for ticketless entry at Red Rocks Amphitheater — a big win for Amazon — but it cut ties with the retailer after the publication of an open letter that suggested Amazon could share palmprint data with government agencies and that it could be stolen from the cloud by hackers.

A group of U.S. senators also pressed Amazon for more information about its plans with customer biometrics shortly after the technology’s launch. Plus, Amazon is facing a class action lawsuit over failure to provide proper notice under a NYC biometric surveillance law, related to the use of its Amazon One readers at Amazon Go stores.

Despite these concerns, Amazon is pressing forward with its Amazon One expansion efforts, having recently landed the Panera deal, for instance.

“We are excited to team up with Amazon One to launch their age verification feature at Coors Field,” said Alison Birdwell, president and CEO of Aramark Sports + Entertainment, a provider of food and beverage and retail locations in various North American sports venues, including Coors Field. “Consumer preferences are ever evolving and demand for faster service models continues to grow. Amazon One’s latest capability directly responds to those demands by delivering a new level of convenience to the age verification process, shortening the time it takes to make an alcohol purchase, and improving the overall guest experience at Coors Field,” she said, in a statement.

Amazon One with age verification is available now at Coors Field, Amazon says.

Amazon’s palm-reading payment tech is coming to Panera Bread

Amazon’s palm-scanning payment tech will now be able to verify ages, too by Sarah Perez originally published on TechCrunch

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Zamp wants to give online sellers ‘freedom from sales tax’

State and local governments collected approximately $137.7 billion in sales tax during the first quarter of 2022, a 17% increase from the $117.7 billion collected in the same quarter of 2021, according to the U.S. Census Bureau.

As Rohit Bhadange, co-founder and CEO of Zamp, explains, every state, county and city has different tax jurisdictions whose laws businesses must comply with, making over 12,000 taxable districts.

They have to do this because of the South Dakota v. Wayfair Supreme Court decision made in 2018, which ruled that online sellers were required to register for a sales tax permit and then collect and remit sales tax to each jurisdiction.

Sellers do this when they meet two laws: physical nexus laws, in which the seller would have a physical presence in the state through employees and warehouses, and/or economic nexus laws, in which the seller exceeds revenue and/or transaction thresholds within the state.

Making it more difficult to comply is when districts frequently update their rates and rules. That’s why Bhadange, Edward Lando and Clete Werts started Zamp in 2022, to develop an end-to-end platform to manage the sales tax life cycle for e-commerce, enterprise resource planning and marketplace platforms, including nexus monitoring, product categorization, rooftop-level tax calculation, registration and filing.

Bhadange told TechCrunch that businesses using current software options can spend up to 500 hours a year to stay compliant. Online sellers can implement Zamp through integrations or an API and use it to calculate and aggregate sales tax across multiple sales channels, while Zamp monitors and communicates when a seller needs to make a filing.

Zamp sales tax software Clete Werts, Edward Lando, Rohit Bhadange

Zamp co-founders, from left, Clete Werts, Edward Lando, and Rohit Bhadange. Image Credits: Zamp

Bhadange and Lando are both with pre-seed investment firm Pareto Holdings, while Werts and other team members were first employees of Stripe-acquired TaxJar and Vista-acquired Avalara, as well as former state auditors, sales tax experts and research specialists.

Zamp joins companies like Stripe, Vista, Anrok and Taxdoo in providing tax compliance solutions to businesses. In addition to giving customers back those hundreds of hours spent making filings all year, Bhadange says Zamp differs from competitors by providing its service through a single SaaS fee and doesn’t make customers have to learn or manage the software themselves.

“Customers are not even confident that they’re doing this accurately, so we’re the partner that’s going to track, monitor and notify them to ensure that they’re always compliant,” Bhadange said. “We execute against any changes so the customers are safe, and we even eliminated the pesky transaction overage fees, which are common pain points for customers. We’re giving customers back freedom from sales tax.”

The company is doing this after closing on over $4 million in fresh venture capital earlier this year. The round included Valor Equity Partners, Soma Capital, Day One Ventures and a group of angel investors, including Truebill’s Yahya Mokhtarzada, OpenGov’s Zac Bookman, Shutterstock’s Jon Oringer and Ripple CEO Brad Garlinghouse.

Other than saying Zamp has paying customers and a roster that includes Obvi, Sanzo, YumWoof, Gravity Grabber and Little Hunter, Bhadange was pretty mum on the company’s traction over the past year. Zamp will use the new funding to develop and automate its solution, make new hires and prepare to support customers selling internationally.

“Our focus is largely on developing an automated solution and just delivering a better experience,” Bhadange said. “We are building a more formidable team and just saving as many customers as we can from the burden of sales tax compliance.”

What do recent changes to state taxes mean for US SaaS startups?

Zamp wants to give online sellers ‘freedom from sales tax’ by Christine Hall originally published on TechCrunch

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8fig gives smaller e-commerce businesses the ‘C-suite’ they’ve always wanted

E-commerce businesses don’t often build big companies: they might be big in revenue, but remain lean in headcount. However, 8fig believes these companies should still be able to get the expertise of, say, a chief financial officer, but in a way that works for their business.

When Yaron Shapira, Assaf Dagan and Roei Yellin started 8fig in 2020, the company, based out of both Austin and Israel, was focused on providing lending and supply chain management tools to e-commerce businesses struggling to manage their cash flow as they grow their businesses.

However, after raising $50 million in 2021, CEO Shapira said e-commerce began shifting from growth to profitability approaches as the rising cost of customer acquisition and changes in privacy were changing unit economics.

Now 8fig is building out a “C-suite” for e-commerce companies, CEO Shapira told TechCrunch. AI CFO is the first new product, providing cash flow planning. When the company is still small, planning is easier, but when the business is growing significantly and becoming more complex, that is where Shapira said companies miss out on cash flow management.

“Usually these kinds of companies will never have a CFO, someone who’s actually doing the financials and all the calculations, instead using external accountants to help them,” Shapira said. “This means that there’s a huge gap in their planning.”

8fig Yaron Shapira, Roei Yellin, and Assaf Dagan

8fig co-founders, from left, Yaron Shapira, Roei Yellin, and Assaf Dagan. Image Credits: Look Photography

AI CFO offers a self-serve web application where companies can do their cash flow planning automatically, and then if they need it, can get business continuity planning from 8fig.

Since its inception three years ago, 8fig has delivered over $500 million in funding to online sellers. In 2022, it grew its customer base and annual revenue by 900% and 800%, respectively. During that same time period, the company also tripled its employee headcount and released both a mobile app version and freight management and payment functionality.

Now the company is flush with $140 million in new funding that closed in April, $40 million in Series B equity and $100 million in a credit facility, to work on a full AI executive suite that will include AI chief marketing officer and AI chief operating officer features later this year.

The funding was led by Koch Disruptive Technologies with participation from existing investors Battery Ventures, LocalGlobe, Hetz, the Jesselson family and Silicon Valley Bank, which is now a division of First Citizens Bank. Shapira said this was an “up” round in terms of valuation and brings 8fig’s total funding to $196.5 million.

“In these turbulent times, technology can help e-commerce businesses with their planning, so you will see a lot of effort on that from us,” Shapira said. “Helping our clients with only AI CFO is good, but not perfect. If we’re able to help them in their marketing and logistics, this can be super important. We are going to invest in these areas in order to help our clients to do great work themselves and to be successful in the next year and the next two years, which is the future that we are looking at.”

How e-commerce companies can brave the new retail environment

8fig gives smaller e-commerce businesses the ‘C-suite’ they’ve always wanted by Christine Hall originally published on TechCrunch

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Praktis lands $20M to help Indonesian D2C brands handle their supply chains

Small to medium-sized enterprises contribute 60% of Indonesia’s gross domestic product. But companies in the D2C space still struggle to compete against bigger brands. Praktis wants to put them on a more level playing field.

The startup, which handles everything from raw material purchases to order fulfillment for D2C brands and suppliers, announced today it has raised $20 million in Series A funding. The round was led by East Ventures (Growth fund), with participation from Triputra Groiup and SMDV.

Praktis co-founder and chief executive officer Adrian Gilrandy told TechCrunch that even though 60% of Indonesia’s GDP comes from SMEs, many experience difficulties while scaling up their business operations. These include finding reliable suppliers, getting fair pricing, the cost of labor and high exposure to fixed costs.

Praktis' team

Praktis’ team

Through its platform, Praktis’ customers are able to manage this business operations, including raw material purchases, production, fulfillment and logistics. Gilrandy said Praktis also aggregates purchasing and processing for economies of scale. This leaves D2C brands free to focus on other parts of their business, including brand building and marketing.

The startup plans to scale up by growing alongside the D2C brands it serves. Gilrandy said its ecosystem can easily be applied to other verticals—for example, it started in fashion before moving on to the beauty industry. Praktis claimed 12x growth year-on-year from 2020 to 2021 as the COVID-19 pandemic accelerated adoption of its services, and 4x growth year-on-year from 2021 to 2022.

Praktis will use its new funding for technology development for both brands and suppliers, building its team and expanding its end-to-end supply chain ecosystem.

The startup also announced today it has appointed Leonard Pontoh as its chief financial officer. Pontoh is also joining its board of directors.

In a statement, East Ventures co-founder and managing partner Willson Cuaca said, “We are thrilled to double down our investment to Praktis as they strive to empower D2C brands in Indonesia and hit profitability much faster than we expected.”

Praktis lands $20M to help Indonesian D2C brands handle their supply chains by Catherine Shu originally published on TechCrunch

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eBay appoints new head of emerging markets, covering regions like Southeast Asia and India

eBay announced today that it has appointed Vidmay Naini as its general manager for global emerging markets, a role that covers the company’s growth in Southeast Asia, India, Eastern Europe, Israel, the Middle East, Africa and Latin America. Before his new position, Naini led eBay’s Southeast Asia and India businesses.

Naini has been with eBay for 18 years and his previous projects include eBay’s strategic investment in Flipkart.

In a statement, Naini said, “the digital economy is exponentially growing in these markets, with small and medium-sized businesses propelling its growth. Global e-commerce platforms such as eBay can revolutionize export opportunities and expand the reach these businesses can achieve.”

In its announcement about Naini’s appointment, eBay highlighted its 2022 Southeast Asia Small Online Business Trade Report, which found that 99% of all small businesses on eBay currently export items to an average of 25 different international markets on an annual basis.

In Southeast Asia in particular, 68% of “eBay-enabled small businesses” in six countries—Indonesia, Thailand, Vietnam, Malaysia, the Philippines and Singapore—export to 10 or more international markets.

Naini told Tech Wire Asia last July that he expects to see strong growth in Southeast Asia and that eBay’s business in the region was just beginning to take hold. “We’ve seen significant growth in our business, especially with the SMBs selling from this region to the world. The truth is, we are just scratching the surface because we see eBay as a very nascent business here still, and we expect it to grow multifold.”

Easyship strikes agreement to support eBay’s new International Shipping program

eBay appoints new head of emerging markets, covering regions like Southeast Asia and India by Catherine Shu originally published on TechCrunch

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Easyship strikes agreement to support eBay’s new International Shipping program

Easyship, the New York- and Singapore-based startup that enables e-commerce sellers to integrate with more than 250 courier services, announced today it has expanded its partnership with eBay to support eBay International Shipping, a newly-launched program. This means that buyers can now access more regional and express shipping solutions for international destinations through eBay’s platform.

Easyship’s API has already been used in several services on eBay, including label generation, cross-border compliance and tracking in the U.S. It’s also supported domestic and international shipments in Canada and Australia since 2019.

TechCrunch last covered Easyship when it joined the Shopify Plus Technology Partner Program in 2020, at that time making it the only shipping app in Asia for Shopify Plus.

The startup was founded in 2015 by Lazada veterans Tommaso Tamburnotti and Augustin Ceyrac, and former banker Paul Lugagne Delpon, and its backers include Lazada founder Maximilian Bittner and former Richemont CEO Richard Lepeu.

According to the Business of Apps, eBay made about $9.7 billion in revenues in 2022, half of which came from outside the United States. Seven million of eBay’s 25 million sellers are based in the U.S., and eBay’s partnership with Easyship will enable them to start shipping internationally.

In a statement, eBay US vice president Adam Ireland said, “With eBay International Shipping, we’re making global connections more accessible, affordable and profitable, significantly increasing the volume of items available to 200+ countries. Our partnership with Easyship makes it even easier for our sellers to tap into a universe of a new business opportunities.”

For your pitch, last impressions count almost as much as first impressions

Easyship strikes agreement to support eBay’s new International Shipping program by Catherine Shu originally published on TechCrunch

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Klarna’s latest update introduces a personal shopping assistant and new creator tools

Klarna, the payments and shopping platform, announced today new features and updates that aim to give users a more personalized shopping experience.

This includes “Ask Klarna,” a personal shopping assistant where users can speak to real fashion experts; “Creator Shops,” a customized storefront for content creators; an AI-powered discovery shopping feed; and a resell functionality, among other new tools.

The suite of new features – which are rolling out to select regions like the U.S., the UK and Germany — comes as the Swedish fintech company continues shifting its focus away from only being a buy now, pay later platform and more toward becoming an overall shopping destination for its 150 million users.

Separately, Klarna also rolled out a redesigned interface for its app. The Klarna app will now have new tabs: Shop, Purchases, In-Store, Budget and You. The company hopes the update will help consumers discover new products and manage their purchase history more efficiently.

“Over the last 18 years, we’ve transformed into a global shopping destination with smart tools for consumers around the world,” Sebastian Siemiatkowski, co-founder and CEO of Klarna, said in a statement. “The new tools we’re launching today will create richer, more enjoyable experiences for everyone along the shopping journey and create tremendous opportunities for retailers to grow their business.”

With Ask Klarna, the company has enlisted a group of trained shopping experts to help consumers with their purchases via chat or video call within Klarna.com and Klarna’s mobile app. Klarna’s personal shoppers can offer advice and inform them about products from thousands of brands and stores.

The feature utilizes technology from social shopping platform HERO, which Klarna acquired in 2021, to bring product reviews, real-time advice and informative content to its users.

According to a recent Klarna survey, 85% of U.S. respondents said they want a service where they can speak with product experts to get more information about products. The company also noticed that consumers are less confident when it comes to buying more expensive items online, Klarna’s chief marketing officer, David Sandstrom, told TechCrunch.

“When people buy high-ticket items, there is still uncertainty when doing that digitally,” Sandstrom said. “If you want to buy a luxury handbag, especially if it’s not for yourself, there’s just not enough confidence about that purchase. You want to speak to someone.”

Currently, Ask Klarna is limited to luxury fashion items but will soon expand to other pricier items such as TVs, smartphones, drones and other electronics.

“Any kind of high-ticket item where we see that consumer confidence is lacking. That is where we want to insert this feature,” Sandstrom added.

Notably, the new personal shopper service is entirely free for users. Plus, you don’t have to be a top 1% spender to qualify for the service, which Sandstrom says some other fashion companies are doing with their online shopping assistants.

For the moment, the company doesn’t have plans to monetize—at least not yet, that is.

“The business model is probably going to be evolved going forward, depending on how popular it is… We’re gonna see where this takes us,” Sandstrom told us.

At launch, Ask Klarna is only available for U.S. users. It will roll out to the UK and Germany later this year.

Klarna plugs ChatGPT into its platform for faster product recommendations

Last month, Klarna announced its new ChatGPT plugin, which also gives users product recommendations. So, whether you want to ask a human or OpenAI’s chatbot if a trendy designer handbag is worth spending thousands of dollars on, Klarna now allows you to do both.

Speaking of AI, the company has found another way to integrate the tech into its platform. Klarna has a new, personalized and AI-powered discovery shopping feed to help consumers find items that are more relevant to them based on their preferences.

“Our new AI-powered discovery shopping feed is the next evolution of the Klarna app becoming the starting point for every purchase. This builds on a ton of initiatives we’re working on in the AI space, to provide a greater level of personalization to consumers that was once thought impossible,” Siemiatkowski added.

The revamped feed will still have the recently launched search and compare tool at the top of the screen, so users can continue looking up which products are on sale, what the lowest price is, shipping options and what’s in stock.

Alongside the search and compare tool, Klarna also launched its Creator app last year to help influencers connect with brands. The app also allowed content creators to track their performance, earnings and sales.

There are currently 12,000 vetted creators on the platform, according to Sandstrom.

Now, the company is letting creators launch their own storefronts on Klarna.com, so their followers can click through the shop, watch their shoppable videos and buy recommended products.

Similar to influencer shopping app LTK, Klarna’s new Creator Shops feature also lets creators share their personal shop across their social media accounts as well as post content that includes links to every item in the photo or video– which, in turn, increases their chance of earning revenue.

“The Klarna Creator Platform has opened up a new world of opportunities when it comes to affiliate content,” said content creator Lydia Tomlinson in a statement. “With my new Creator Shop, I have the perfect place to showcase everything I’m wearing, using and loving. Now my followers can easily find and shop my latest looks all in one place, saving them the hassle of wondering where to buy.”

Creator Shops are only available on Klarna.com but will soon launch in the Klarna app. The feature has yet to launch in the U.S. yet has rolled out to creators in the U.K., Sweden and Germany.

Klarna launches new creator features and shoppable video

 

If you have clothing that’s been sitting in your closet untouched, Klarna is offering to help speed up the process of reselling it–but only if you used Klarna to buy it. The company is introducing a resell feature that enables Klarna shoppers to resell products that they no longer want.

In the Klarna app, users can tap on the “Resell” button next to an item from their order history. Users are then directed to a third-party re-commerce platform. Klarna pre-fills the listing with product details, description and images, which can often take up a lot of time. Users can set the price of the item.

The resell feature launched earlier this year and is currently only available for Swedish users. Klarna has partnered with resell platform Tradera, and is set to launch soon with more partners across the world.

Later this year, Resell will roll out to the U.S., the U.K. and Germany.

Klarna is also further helping brands with ad creation, audience targeting and campaign optimization. Ads Manager is a newly launched platform for retailers that allows them to access Klarna’s first-party data and target the right shoppers.

Merchants can publish ads right onto Klarna’s personalized shopping feed.

There are about 450,000 brands on the platform, including Steve Madden, Nike, Lululemon, Marc Jacobs, Michael Kors and more.

Klarna wins over the US

 

Klarna’s latest update introduces a personal shopping assistant and new creator tools by Lauren Forristal originally published on TechCrunch

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Rally bags $12M to build the future of e-commerce checkout

E-commerce had a moment during the global pandemic, but not only have things chilled since then, it’s gotten downright competitive as the economy cooled in the past year, according to Jordan Gal, co-founder and CEO of Rally.

“Founders in this space used to speak of optimism, but that has turned into realism, and people are more careful,” Gal told TechCrunch. “The pie seems to have stopped growing, and there’s more ferocious competition for what’s left in that pie.”

Gal went on to explain that merchants are having to make harder decisions, including whether they can afford to invest in software.

That’s why Rally, a composable checkout platform for e-commerce merchants, has broken up its business into two segments: the first to meet merchants where they are with integrations to commerce tools, like Salesforce Commerce Cloud, Magento and BigCommerce; the second to offer merchants a “headless” ecosystem.

As post-pandemic e-commerce booms, Rally raises $6M for headless checkout platform

The term “headless” refers to the ability to change the front end or back end of a website without affecting the other. Gal said he was not able to provide details just yet, but said Rally is close to announcing a partnership with companies specializing in front end and back end to offer headless-as-a-service.

Gal started Rally with Rok Knez to create checkout tools for merchants outside of the Shopify ecosystem. Both were previously involved with another checkout company, CartHook, and led the company to process nearly $3 billion in transactions for Shopify merchants before selling to Pantastic in 2021, Gal said.

Rally, which is working with 50 e-commerce merchants currently, provides one-click checkout with payment processing and tools for post-purchase offers that turns the purchase into a multi-revenue channel by allowing the merchant to inject offers after the checkout. For example, rather than going right to a “thank you” page, consumers would be offered the option of upgrading to a subscription or purchasing additional similar products in a way that doesn’t interrupt the payment flow.

Implementing the post-purchase offer has helped merchants increase revenue by over 12% on average, Gal said.

Meanwhile, over the past 12 months, Rally has doubled the size of its team and is “doing millions in monthly GMV (gross merchandise volume),” Gal said.

TechCrunch previously profiled the company when it raised $6 million in seed funding. Today, the company announced additional funding of $12 million in Series A funding. It was led by March Capital, which was joined by Felix Capital, Commerce Ventures, Afore Capital, Alumni Ventures and Kraken Ventures. The new investment, which closed in the first quarter of 2023, gives Rally $18 million in total venture-backed capital.

Gal plans to focus the new funding on go-to-market, including entering new markets, like enterprise and international, and expanding integrations beyond Swell, BigCommerce and others, including Salesforce Commerce Cloud, commercetools, Affirm and AfterPay. Rally will also focus on strengthening its fraud protection offering and build out web3 features, starting with allowing merchants to accept cryptocurrencies in their checkout.

“We want to establish a reputation as the best choice when a merchant is looking to either upgrade their checkout or build a new site without having to build their own checkout,” Gal said. “You can’t just build it and leave it alone, so merchants are looking for a partner that they can trust so they can focus on what they’re best at.”

If you have a juicy tip or lead about happenings in the venture world, you can reach Christine Hall at chall.techcrunch@gmail.com or Signal at 832-862-1051. Anonymity requests will be respected. 

Why the ‘last click’ in e-commerce matters — and how to get it right

Rally bags $12M to build the future of e-commerce checkout by Christine Hall originally published on TechCrunch

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After GoFundMe, Rob Solomon is flying a $200M Kite in the land of commerce

Three years after stepping down as GoFundMe’s chairman and CEO, Rob Solomon is returning to the industry he calls his “first love,” digital commerce, as co-founder and CEO of Kite, a commerce company focused on investing in, acquiring and operating high-potential, digital-first consumer product brands.

In addition to GoFundMe, Solomon has a pretty extensive commerce background from roles at companies like Yahoo (running the commerce business unit) and Groupon (president and COO). He told TechCrunch he “knows Commerce 1.0 quite intimately,” and always wanted to get back to shopping.

“We’re entering a pretty interesting phase where e-commerce is for real,” Solomon said. “I say that flippantly. It’s big, but it’s still a small percentage of overall commerce. Physical commerce still dominates. The reality of commerce in the future is it’s not online. It’s not offline. It’s not Amazon. It’s not Shopify. It’s not direct-to-consumer. It’s just every channel.”

Rob Solomon Kite

Rob Solomon, co-founder and CEO of Kite. Image Credits: Kite

Solomon started the company in 2022 with investment firms Juxtapose and Blackstone, which provided Kite with $200 million in equity funding to get started. The idea is to strategically acquire outfits with that money, then to help brand founders with capital and operations to accelerate their business from e-commerce to social, retail and beyond. Part of that vision includes building a tech stack that leans on artificial intelligence and API to provide better manufacturing, supply chain, design and customer acquisition capabilities.

That description sounds an awful lot like an e-commerce aggregator, a company that buys consumer product companies and uses tech infrastructure to scale them. Further, one of Kite’s board members is Delta Dental president and CEO Mark Mitchke, who was previously general manager of Fulfillment by Amazon. Still, Solomon insists Kite is something else, something newer.

“The best way to think about it is it’s a commerce platform company,” Solomon said. “We want to own and operate a finite number of brands, which will train the system. We want to invest in commerce, businesses and software companies to help build the ecosystem. We want to ultimately provide a platform to tens of thousands, if not hundreds of thousands, if not millions, of direct sellers over the next decade.”

There are a lot of inefficiencies, friction and high costs for most small and medium direct sellers, so Kite is building the software and providing the services for how products are made, moved, marketed, shipped, stored and sold at scale, Solomon explained.

Jed Cairo, co-founder and partner at Juxtapose, echoed Solomon in a written statement, writing that his firm believes “consumer-facing commerce is in the early innings of a revolution. More and more categories are moving away from brands advantaged by hyper-scale, TV advertising and big box retail relationships to specialized, smaller, high-passion brands that are nimble and powered by world-class technology.”

As for how Kite gets there, Solomon has already surrounded himself with a group of people, including a GoFundMe colleague, Ujjwal Singh, who is chief product and technology officer; Nastasha Tan, chief design officer, who was previously with Ideo and Uber; and supply chain and operations expert John Kufner as chief operations officer.

Joining Mark Mitchke on the company’s board is James Chen, CTO of Built Technologies and former CTO of Flexport.

How e-commerce brands can outlast this market downturn

Meanwhile, Kite has acquired a couple of undisclosed businesses, including one in the fitness category and in the broader self-improvement category. Solomon said it is a good time to start Kite because out of economic corrections often come “some of the best companies in the world,” because they’re disciplined about spending money and focused on building durable businesses.

Comparatively, notes Solomon, for years leading up to the market’s abrupt shift last year, brands were told to grow at all costs and “don’t worry about creating an efficient, effective cash flow generating business model.” When the market corrected and capital was tough to obtain, growth among small e-commerce brands flattened, and many acquirers, including e-commerce aggregators, had to stop activity.

In fact, even a year later some acquirers are still on “pause mode” with regard to acquisitions, said Taliesen Hollywood, director of specialist M&A at London-based Hahnbeck, in an email interview with TechCrunch.

Hollywood, who brokers deals between buyers and sellers of e-commerce companies, said that aggregators today are being “far more selective” than in 2020 and 2021, and that “brand equity, defensibility against competition and scale are more important, among other things,” which means that “far fewer acquisition targets meet their criteria.”

Indeed, when asked about the kinds of brands Kite is interested in acquiring, Solomon said that durability and relevance were important, but quality “is very important.”

“If you can take what great brand companies have done and apply technology to them, you have a really interesting opportunity to create the brands of the future that will become the consumables and the durables that have defined the last 100 years,” Solomon said. “In the way great consumer goods companies have defined everything in product for the last century, there’s going to be new companies that get created that come and take some of the share away. That’s part of what we’re hoping we can do with our owned-and-operated brands: help them gain market share advantages over time.”

What does the future look like for e-commerce aggregators?

After GoFundMe, Rob Solomon is flying a $200M Kite in the land of commerce by Christine Hall originally published on TechCrunch

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Staytuned bags $34M in equity, debt to build ‘Salesforce suite for e-commerce’

Staytuned Digital has $34 million in new equity and debt to continue developing a software suite for e-commerce brands with a goal of what co-founder Serge Kassardjian described as “the Salesforce suite for e-commerce stores.”

“E-commerce has completely shifted and is moving to these emerging platforms, with Shopify being the biggest one,” he said. “In turn, we’re buying and building software that’s around the Shopify ecosystem.”

The software company focuses on Shopify merchants and acquires and builds e-commerce applications. It has acquired seven apps so far and is working with over 28,000 customers, co-founder Serge Kassardjian told TechCrunch.

While Kassardjian declined to disclose revenue growth, he did say the company was EBITDA positive in the fourth quarter.

The new investment includes $9 million in equity and $25 million in debt with the option of taking up to $25 million more, Kassardjian said. To date, the company has raised $46.5 million in a combination of equity and debt.

Investors in the new round include TenOneTen, Rembrandt VC, Hawke Ventures, DragonX, FJ Labs, Interlace, Riverpark Ventures, Comma Capital, Kotti Capital, Alumni Ventures Group, Jason Finger, and a group of angel investors. Tacora Capital led the debt funding.

TechCrunch profiled Staytuned back in 2019 when the company was focused on video. Kassardjian said that 11 months after starting the company, he and co-founder Randy Jimenez realized the product didn’t work and did “a hard pivot.”

“We went to our board and told them that we had burned very little capital, say a half a million or so,” Kassardjian said. “All our investors were like, ‘we invested in you guys and we believe in you.’ So we went back to the drawing board and this was a successful pivot. We brought in a whole new set of investors as well, and every valuation has been higher and higher.”

Lauralynn Drury has since joined the founding team to help build the products and scale the strategy.

The new funding will enable Staytuned to acquire more apps — Kassardjian said there is a long pipeline of potential apps to acquire — hire additional engineers and scale faster.

“Software is super high-margin and it grows faster than Shopify, while Shopify grows faster than the e-commerce ecosystem,” Kassardjian said. “So if we buy and build enough software, we can have the largest hub of brands and merchants using the software, which is going to drive e-commerce in the future.”

Quantifying the global e-commerce slowdown

Staytuned bags $34M in equity, debt to build ‘Salesforce suite for e-commerce’ by Christine Hall originally published on TechCrunch