Gamification and social hooks have become cornerstones across every category of consumer apps these days, and today one that’s using these to build out a new e-commerce platform is Europe is announcing a seed round to give its growth a boost. Blidz — a social shopping app that offers big discounts (many items in categories like jewelry, clothes and gadgets sell for just $0.99 on there) on goods based on how many people are coming together to buy them, and then presents users with a selection of games on top of that to unlock more deals — has picked up €6 million ($6.6 million at today’s rates) in a seed round of funding after seeing its early growth reach 50,000 monthly users.

General Catalyst — one of the group of VCs out of the U.S. that have turned increasing attention to backing startups out of Europe in recent years — and European VC Peak are co-leading this round, with D4 Ventures, Fabric Ventures, FJ Labs and previous backer IPR.VC also participating, along with a few individuals: Youngme Moon (the Harvard professor who focuses on the digital economy), Christopher North (formerly a longtime Amazon exec, now primarily an investor) and Don Hoang (the ex-Uber and Revout exec).

If you are au fait with the world of social shopping and the description of Blidz sounds a little familiar to you, it might be because it is in large part a clone, specifically of Pinduoduo, the wildly successful gamified social shopping app in China, which CEO Lasse Diercks, who co-founded Blidz with Markus Haverinen (CPTO), cites as a direct inspiration.

“We saw the trend of Pinduoduo, learned how the model worked, built it and sent it out to the market a little over a year ago,” he told me matter-of-factly in an interview the other day.

Pinduoduo’s fortunes and challenges are bookends worth contemplating with thinking about Blidz: the Chinese platform currently has a market cap of nearly $60 billion (it’s listed on Nasdaq in the U.S.) and nearly 870 million active buyers — although recent growth has been slowing on the back of more competition and the weaker performance of China’s economy overall. That speaks of a lot of potential for Blidz, but also some of the same growth issues longer term.

The longer-term challenges, however, seem to be a far-off consideration at the moment for a startup that is only a year old. Like Pinduoduo’s founder Colin Huang, Diercks tells me he saw an opportunity to provide a different offering to the market beyond the domination not just of Amazon but the Amazon approach to e-commerce that was essentially being repeated by other marketplace platforms (build for scale with a huge number of SKUs, optimize around personalization, search and ads to surface products to potential buyers, improve margins by providing your own products alongside these and/or other logistics economies of scale).

“Our vision is to liberate Western consumers,” Diercks said. “We want to offer the western consumers better and less expensive shopping experience.”

In his view, that offering is addressed in two ways. Firstly, it’s about the front-end experience. Using gamification (currently there are four games on Blidz, and there will be more coming), Blidz also uses social hooks (share your deal on your timelines and in messaging to friends and groups!) respectively to engage users, getting them to create their own network effect by recommending products to people they know over other social channels, and for people to be won over to buying goods by seeing how many others are also buying them, and the price lowering as a result.

(That indeed has been a trick used in the pre-internet days, too, initially pioneered by home shopping live TV shows where people phoned in to buy goods.)

Secondly is the choice that Blidz, like Pinduoduo before it, is making to accept a much lower margin on sales in exchange for selling more goods.

Translating that to today’s internet landscape in regions like Europe and the U.S. was a no-brainer since the market has so little variety in it at the moment.

“Sixty percent of e-commerce in Europe today is dominated by Amazon, and then a long tail of others like it. We believe that there is a monopoly in price extraction,” he said. “In the end, that’s the vision of the company, to offer Western consumers a better and less expensive shopping experience.”

The solution, he believes, is to accept a much smaller margin on goods sold and aim for simply selling more of them to make up the difference and then some. China’s Pinduoduo, he said, sometimes makes as little as 0.5% off a sale. “This is a 60x difference compared to for example Wish.”

China is playing another key role for the company beyond being the market that birthed the platform that is Blidz’s inspiration: it’s also the key country in the supply chain for goods that are sold on Blidz. That’s reality commerce for you: although there are definitely signs of some startups building business models that nurture more manufacturing and goods production closer to those who are making purchases, China remains a critical supplier for the wider consumer market, and will be for a long time.

“We are building a supply chain in China where we have a team ex-Wish guys. They are building this for us,” said Diercks. This is not about buying cheap goods, but tapping into a newer generation of products coming out the country’s factories that are just as good and sometimes better than the average offerings. It then buys these in bulk, in a concept he described as “quality-to-price.”

“We don’t want to work with every supplier. We want to work with a select number,” he said. And that constrain of supply appears to be giving Blidz better bargaining power, he said. “They are waiting to come on board. The end vision is to be the Shein of this space,” he added, referring to the Chinese fashion sensation that has leveraged its own direct relationships with clothes and accessory manufacturers to source a higher level of quality, and then sells those goods directly to consumers itself.

The social shopping space is littered with a lot of businesses that appeared to be rocket ships, only to fizzle out their engines before reaching long-term, stratospheric orbits. Diercks doesn’t believe that Pinduoduo, and now Blidz, are comparable to these. “We don’t believe that Groupon or LivingSocial were ever really that social,” he said, because they never truly leveraged people’s own social graphs in their selling approaches. They are also more focused on experiences rather than products in their DNA, even if more recently Groupon’s goods business has shifted that somewhat.

The potential here of building out that model to more markets and possibly picking up more localized variations along the way, and picking up what looks like a base of loyal users up to now, have together been enough to sell the idea to top investors willing to take a punt on it.

“The Blidz founding team has a number of unique insights relating to the evolution of online commerce,” noted Adam Valkin, MD of General Catalyst, in a statement. They are creating a new customer experience in the West by combining social media, gaming and shopping into a data-driven entertaining and easy-to-use platform. We’re excited to see what emerges from this talented team.” 

FedEx has been working on a new feature for its consumer mobile app that would seemingly allow it to better compete with the popular Shop app by Shopify. One of the bigger selling points for Shopify’s Shop is how it allows users to track their purchases and shipments from across services, including not only Shopify, but also Amazon, and other deliveries coming through FedEx, UPS, USPS and other services by importing delivery tracking information from users’ email inboxes. FedEx, meanwhile, appears to be headed in a similar direction with a feature called “Crosstrack,” which tracks a user’s expected deliveries in a separate section from the tab from the one where FedEx deliveries are shown.

The feature, which was shared with TechCrunch by a developer, is currently in development.

It shows how the mobile app’s search and tracking screen would be split into two tabs: one labeled “FedEx” and another labeled “Crosstrack.” In the Crosstrack tab, FedEx app users could see a photo of their incoming purchase, the sender’s information — like Target, eBay, or Wayfair, for instance — and the date of the scheduled delivery alongside the tracking number. When the item has arrived, the app will notate this with green text and a green checkmark.

Image Credits: FedEx mobile app screenshot

Unlike Shopify’s Shop, this expanded functionality doesn’t extend into shopping or product recommendations — it’s only for tracking, FedEx says.

The company confirmed the feature’s development with a statement.

“FedEx is constantly exploring digital experience concepts to help meet our customers’ needs. This is one of the many things we have tested with customers,” a FedEx spokesperson said. The company declined to provide additional details about the feature nor would they even confirm that the term “Crosstrack” here actually means “non-FedEx” deliveries. But it’s hard to imagine another use case for having two tabs in the app’s tracking section — only one of which is labeled “FedEx” — for any other purpose. (We gave FedEx the opportunity to correct this description of “Crosstrack,” and they declined to say anything more beyond their statement.)

The development, if as described, would be interesting as it represents the competitive pressure Shopify is having on the wider industry. As e-commerce booms, in part thanks to consumer shifts prompted by the pandemic, the ability to track all packages in one app has become a key selling point for Shop. The Shopify app today is now No. 4 in the Shopping category and has a noteworthy 4.8-star rating across some 3 million reviews, which speaks to consumer demand for this sort of offering. FedEx would do well by serving its audience with a similar feature.

It’s worth noting that FedEx, like most major companies, tests many new product experiences, and only a subset of those actually make their way to the public. In this case, the Crosstrack product is considered a “concept” that FedEx is testing, we understand, but it’s not one that the company is ready to announce in terms of a public launch.

Welcome to The TechCrunch Exchange, a weekly startups-and-markets newsletter. It’s inspired by the daily TechCrunch+ column where it gets its name. Want it in your inbox every Saturday? Sign up here. 

Happy Saturday, friends; I hope you are well. As you read this, I have scooted back to my regular digs up in the Northeast, leaving sunny New Orleans behind. Yes, next week’s writing will be more emo on account of the weather. Regardless, there are two things to talk about today, so let’s get busy! — Alex

When APIs evolve into platforms

Earlier this week, The Exchange chatted with Shippo founder and CEO Laura Behrens Wu about her company’s announcement that it has inked a partnership with Shopify.

Shippo is in the shipping game, offering a SaaS offering to merchants that gives them access to bundled, and therefore cheaper, rates for moving goods. Last year the company raised $45 million at a valuation of just under $500 million. (Back in 2019, when the company raised $30 million, Behrens Wu said that her company has SaaS-like gross margins, for reference.)

The company has grown quickly, doubling shipping volume in 2020 — which at the time tracked loosely with revenue — and doubled in size back 2019.

In early 2021, when we last checked in with Shippo, it had a neat plan ahead of it to keep that growth flowing (emphasis added):

Now flush with more capital, what’s next for Shippo? Per its CEO, the startup wants to invest more in platforms (where Shippo is baked into a marketplace, for example), international expansion (Shippo only does a “little bit” of international shipping, per Behrens Wu), and double-down on what it considers its core customer base.

This week, Behrens Wu said that offering shipping is now “table stakes” for both platforms and marketplaces, so individual sellers expect that if you offer them a digital storefront, they expect payments support along with an option for shipping. Shippo wants to be that shipping tool that platforms offer.

The CEO said that after getting inbound interest from marketplaces about 18 months ago, her team got to work on building an API for its service that allows others to bake Shippo’s service into their marketplace.

There’s a revenue share component in the deal, according to Behrens Wu, but with Shopify and other potential partners offering huge volume gains, the math could pencil out well for Shippo. That’s because its service gets better with volume. The more packages that Shippo helps ship, the better deals it can land with shipping companies around the world. And now it has a way to dramatically expand its total volume, perhaps improving its ability to rip monetary value out of the e-commerce shipping world.

We’re going to need to check in with the company in a few months to see how things are going, but it all feels rather bullish.

Behrens Wu reached out after noting our reporting on the growth of API-powered startups. Well, now the company has an API that is key to its overall growth trajectory, our thesis holds: SaaS is neat, but APIs could be the future-facing business model to beat.

Insurtech: Still not dead!

Not to overly savage the expired equine, but insurtech has had an up and down few years. From huge fundraises for neoinsurance startups to big dollars for insurtech marketplaces, we saw a string of IPOs that failed to hold onto value post-debut. It’s been messy.

And yet. The Exchange wrote earlier this year that insurtech venture capital activity was actually strong last year despite the barrage of negative news concerning some of the sector’s best-known names. Things were once so hot that we tried to figure out “why VCs are dumping money into insurance marketplaces” back in early 2020.

Well, the VCs are still at it. This week Policygenius announced that it has closed a $125 million round. The company’s software essentially allows consumers to find and buy different insurance products online. Given how large the insurance market is, getting folks to the right product is big business. A bit like how Credit Karma was valuable as heck, if you will.

Policygenius competitor The Zebra raised $150 million last April, for reference, so the Policygenius round is not an entire surprise. But it does underscore the fact that public-market news can help accelerate a startup sector, but that it can’t — it seems — kill it off.

ClearBank — a UK fintech that has built a new set of cloud-based financial rails that allows banks and other customers real-time clearance on payment transactions and other financial services — has closed a big round of funding, money it will be using to take its services beyond its home market and move into newer areas such as cryptocurrency exchanges. The company has raised £175 million ($230 million at today’s conversion rates), from a single investor, the PE firm Apax Partners.

The startup — founded in 2015 and launched in 2017 — is not disclosing its valuation, but CEO Charles McManus said that the company had prior to this raised £195 million from investors that include Canadian businessman John Risley and PE firms PPF Group and Norther Private Capital, and that its new valuation after Apax’s investment is a significant increase. PitchBook notes that as of the end of December, ClearBank’s valuation was just under £274 million, which likely puts the current valuation at $590 million at its most conservative estimate.

But the company’s current size and ambitions speaks to potentially larger numbers. Originally founded by Nick Ogden, who was also the founder of WorldPay (which Fidelity acquired for $43 billion, which was at the time the biggest deal ever made in international payments sector), ClearBank currently has 200 customers — large financial institutions and fintechs using its infrastructure to enable faster transactions — with the list including UK businesses like Tide and Oaknorth, but also international companies like Coinbase, which uses ClearBank for clearing and payments services for its UK customers. Those customers cover some 13 million bank accounts and £3 billion (nearly $4 billion) in assets.

The tech world has been awash in “fintech” for a number of years — with a wide swathe of challenger banks; businesses built on the concept of APIs and cloud computing and “embedded” financial services from third parties; artificial intelligence, personalization and mobile apps; and a number of other tech-led innovations, all corralled in the call to disrupt incumbents with new and arguably better and easier to use approaches to spending, saving and investing money. The growth of e-commerce and other services on digital platforms has further spurred that trend.

But ClearBank’s existence underscores one of the untold truths amid all of that innovation: many of these new services have been built on top of legacy infrastructure. Some companies like Stripe have built tech to get around some of the hurdles that arise as a result of this: for example, it can take typically days to reconcile and settle a transaction on traditional payment rails. Fintechs like Stripe will offer faster processes not because they have rebuilt that infrastructure, but because they have used tech to assess the overall risk of any single transaction getting rejected and is taking the calculated risk itself, charging extra fees to provide that service (and to in aggregate make money from those transactions that offsets any one of them not going through).

“Europe and and the U.S. have been very slow in modernizing,” McManus said “26 countries are only just implementing the Faster Payment scheme that the UK has had for some time. Just look at the discussions on SWIFT and cutting off Russia, and how slow that has been moving.”

The alternative is to build a new version of that infrastructure from the ground up that just works faster, which is what ClearBank says that it has done.

ClearBank describes itself as the first clearing bank to have launched in the U.K. in 250 years — the ‘big four’ that have ruled the clearing roost in the country up to now being Barclays, Lloyds, HSBC and NatWest — and its aim is to use the rails it has built to run payments services in the U.K. faster than those incumbents, and continue to expand it to more services in its home market, as well as take them abroad.

“Our aim is to provide real-time services for everything,” McManus said. As he explains it, ClearBank has built everything into one stack, which not only means that money moving is going through a single system rather than through several different channels, but also lets those plugging into its system “better visibility” into how funds are moving. “That means a greater level of comfort, visibility and faster transactions,” he said.

The company today provides banking-as-a-service to its customers both for their needs as businesses, and for them to in turn provide to their customers. It also provides links to the four main channels that are used in UK to handle payments, Faster Payments, BACS, CHAPS and direct debit.

The company launched multi currency and foreign exchange services several months ago to UK customers, and plans for the investment will include expanding that to other currencies and facilitating interbank payments, both to provide the services to existing customers that have international footprints, and to work with customers in other markets.

One of the big changes that fintech has brought is that it’s become significantly easier for non-financial companies to move into financial services, and in the bid to grow revenues and touchpoints with customers, many have. That spells opportunity for companies that are enabling that adoption.

“All companies are becoming fintech companies, and ClearBank is providing the clearing and embedded banking infrastructure for them – starting with fintechs themselves,” said Mark Beith, a partner at Apax Digital, in a statement. “We’ve seen the power of its platform first-hand, and we are excited to partner with Charles and the existing shareholders to take ClearBank global.”

ClearBank’s rise points to how, as fintech continues to mature, we’re starting to see a new generation of startups emerging that are willing to tackle that last front tier of infrastructure. Just earlier this week, a startup out of Germany called Payrails (the ambition is spelled out in its name) also launched with funding from a16z with its own ambitions to build new infrastructure to handle payments specifically for marketplace and other businesses that sit in the middle of complex transaction architectures.

Google today announced two new tools for businesses that operate extensive delivery fleets: the Last Mile Fleet Solution and the Cloud Fleet Routing API. The new Last Mile Fleet Solution, which is part of the Google Maps platform, puts an emphasis on optimizing every step of the last-mile delivery process from ordering to delivery. As the name implies, the new Routing API, which is part of Google Cloud, focuses on route planning across fleets of delivery vehicles.

The Last Mile Fleet Solution is now in public preview. The Cloud Fleet Routing API will become generally available in the second quarter of the year. Since both are enterprise services, there’s no public pricing information available and potential customers of either product have to work with Google’s sales team.

“The pandemic further accelerated both e-commerce and the number of deliveries, which were already growing rapidly. The increased strain on delivery networks, plus many other factors like driver shortages, poor address data, factory closures, and an increase in fuel prices have impacted delivery time and success,” said Hans Thalbauer, Managing Director, Global Supply Chain & Logistics Industries, Google Cloud. “With Google Maps Platform’s Last Mile Fleet Solution and Cloud Fleet Routing API, we’re making it easier for delivery fleet operators to address these issues and create seamless experiences for consumers, drivers, and fleet managers.”

Image Credits: Google

Google Maps Platform already features the On-demand Rides & Delivery solution, which helps businesses dispatch on-demand drivers. The company says the new Last Mile Fleet Solution builds upon this service. The Fleet Routing API, on the other hand, is a completely new Google Cloud service that helps businesses with their route planning. Users will be able to use it to build tools for their internal fleet management systems and have the system optimize delivery routes based on their specific constraints like time window, package weight and vehicle capacity — and in the process they can also optimize their routes to meet their sustainability targets.

“At Paack, we are obsessed with helping some of the largest e-commerce retailers in Europe create exceptional delivery experiences for the millions of orders they receive each month,” said Olivier Colinet the CTO and CPO of UK-based courier service Paack. “To scale quickly, we adopted Last Mile Fleet Solution and Cloud Fleet Routing which enables our drivers and fleet managers to maintain peak efficiency and go beyond our 98% on-time, first-time delivery rates.”

B2B marketplaces have been in many ways slower to modernize than their consumer counterparts when it comes to e-commerce. Today a startup that has been a trailblazer in that space is announcing some funding from a key investor that underscores how this is changing and the opportunities that exist as a result. Profishop, which has built a storefront selling products for business and industrial environments — think power tools, workbenches, and agricultural and catering equipment, but also office supplies — by working directly with wholesalers to build a “just in time” platform for ordering and distribution, has raised $35 million, an equity investment that it will be using both to continue expanding its business and platform in Europe as well as further afield.

Based out of Bremen, Germany, Profishop is now active in 13 markets with its German storefront currently its biggest; earlier this year it also spearheaded efforts to break into the U.S.  Arasch Jalali, the CEO who co-founded the company with Anna Hoffmann (the CTO, who also happens to be Jalali’s wife), said that the company cleared $100 million in sales with 500,000 customers last year, and it’s on track to more than double those numbers this year.

“We have grown 100%-120% year-on-year every year since starting,” he said.

That growth rate is likely what got the company on the radar of Tiger Global — the storied late-stage investor that has been getting more active in Europe and in making earlier-stage bets in recent times — which is the sole investor in this round. Profishop has been active for about a decade and has been profitable in that time. In fact, before this it had only raised a seed round of an undisclosed amount, from Takkt and Howzat, according to PitchBook data.

The initial inspiration for Profishop, and its subsequent growth, is a textbook example of a classic startup story.

Jalali tells me that he first thought about the concept for Profishop when working in his first job out of university, a B2B business, where he saw first-hand how antiquated processes were for sellers and buyers in the market.

It was 2010, but by and large businesses in the B2B space in Germany were still using printed catalogues to lay out to potential customers everything that they had for sale, and the rest of the process for buying was equally analogue: the product purchasing process, including contacting a business to get price estimates and stock checks, were made by fax, comparing different products from different places also involved… comparing different faxed documents.

It was also a tedious process that typically involved middlemen-type players that slowed things down and brought more cost into the system: typically manufacturers of supplies worked with wholesalers, who then might sell directly to businesses, but might also work with further retailers who then finally sold to business customers.

In that context, the bar for entry into disrupting that state of affairs was paradoxically both very high and very low.

Low, because there was so much to do: even setting out to digitize those catalogues, or creating an online payment system would be a significant step towards modernizing — forget about more sophisticated ideas around better search algorithms, more tailored marketing, smart pricing, better logistics services, analytics for suppliers to understand what customers want or do not want to buy, and so on.

High, because it can be hard to convince companies entrenched in traditional ways of doing business to switch things up. And Profishop’s idea for how to switch things up was relatively revolutionary: its idea was to tap directly into the German manufacturing industry to work directly with the companies making products, and to set up a system whereby when a business customer purchased a product, Profishop would pass on the order directly to that manufacturer, who would drop-ship it directly to the business making the order. This “just in time” approach would mean no warehouses and no stock buying-in for Profishop, which was building a platform to position itself as a facilitator between the other two parties.

Jalali said that initial efforts to work with manufacturers were very slow to start with. When it opened for business online it had only five products listed, including a workbench and a locker. And he and his wife had zero experience in e-commerce. “We hadn’t even done any marketing,” he said. “But we got our first sale in 45 minutes.” In fact they hadn’t even had the time or funds to set up stock so the “just in time” first sale almost happened by default.

It was hard-going at first to talk to wholesales and sell them on the idea. “No one believed in us, and some even just laughed in our faces and told us this would never work.”

“We onboarded 20 new manufacturers in our first year,” he said. This year it will be 500 “and it will soon be 5,000.”

Ironically, one of the early nay-sayer brands is now one of its biggest partners. In total Profishop has some 1,600 wholesales and offers 1.6 million items for drop shipments.

In building out this business, Profishop has tapped into some interesting, larger socio-economic trends.

One of the biggest has been the role of manufacturing and how it has shifted over the years. For decades, a lot of global manufacturing has moved over to Asia, and specifically China, which has invested a huge amount in becoming the global leader in this space. Profishop’s whole business model is predicated on manufacturing happening locally to fit its logistics and fulfillment model. Indeed, it currently has no deals with manufacturers further afield.

This has meant that it’s been fostering a new market entry point and business opportunity for more localized manufacturing businesses, but that wasn’t always the case. Jalali noted that in some instances, the factories it visits prior to working with a company were dormant, the company having switched to shipping in supplies from China and using its factories more like warehouses.

“We would ask, ‘Where are your employees? Your site says you have 250 of them.’ They would answer that they now order everything from China,” he said. “But that has changed.” He said that part of the reason is economic: prices have gone up, both in terms of the costs needed to maintain manufacturing quality, but also the logistics and shipping costs for those goods, some 5x on average between 2020 and 2022, he said. “It has meant that a lot are thinking about bringing manufacturing back to Euope or Easter Europe. But it’s a process. It’s hard work but they are thinking about it.” The U.S. business, in part because of the size of the country, has Profishop working with a logistics company to help handle drop shipments, and as it expands in Europe this is likely to be a part of the equation there, too.

In terms of competitors, there are a number of other companies moving deeper into B2B, and no less than major marketplaces like Amazon and Alibaba are already big players (there, it’s wholesalers who do the selling to buyers). Even the name Profishop — a portmanteau of “professional” and “shop” — is not trademarked and is already being used by a specific brand to sell its industrial equipment online directly. It’s a crowded space, but one where building out relationships and offering the more direct option to manufacturers (no wholesalers involved) appears to be giving Profishop a big opening.

“The long-tail of equipment purchases for businesses is often unmanaged and offline. Profishop’s B2B marketplace brings this spend online, allowing customers to easily manage and source more than 1.5 million high-quality SKUs on one platform,” said Griffin Schroeder, a partner at Tiger Global, in a statement. “200,000 active buyers in Europe utilize Profishop, and we are thrilled to partner with Arasch and Anna to help them expand the business internationally.” 

Adobe today announced a number of new features for Customer Journey Analytics, its tool for tracking customers across platforms that is part of the company’s Experience Cloud portfolio.

As the pandemic sped up the move to online shopping for a lot of brands and their customers, the need for being able to manage and personalize the user experience across channels (think web, mobile, in-store, etc.) also increased. But it’s one thing to track all of this data and plot it on a dashboard — it’s another to make it actionable.

To help businesses better understand how even small changes can affect a customer’s overall journey across their various properties, Adobe today launched a new experimentation feature in Journey Analytics that allows them to test real-world scenarios and analyze their results. A company may want to see if a change in their mobile app reduces call center interactions, for example, or see if a change to their website leads to more downloads of their mobile app. It’s basically A/B testing with a focus on the overall customer journey, with the additional benefit that businesses can then use this data to precisely personalize the user experience for individual users or larger segments of users.

All of this is powered by machine learning models that make it easier to find these kinds of correlations across vast data sets. Adobe says this algorithm takes into account “historical data, comparable campaigns, ongoing benchmarks, and more.”

“Often, we’re seeing now people starting in digital — where they may not have before — but they’re still engaging in multiple channels through multiple devices for a singular outcome,” Nate Smith, Director of Product Marketing for Adobe Analytics, told me. “Ultimately, this has driven up the priority of omni-channel analysis for a lot of brands with that focus on lifetime value and retention. What has been a problem is the way that that type of analysis is done.”

Smith argues that the traditional approach, with a data pipeline into a data warehouse or data lake, with a SQL layer and a visualization tool on top, is too cumbersome in an environment where stakeholders need quick answers to questions that are often seemingly simple but hard to put into code.

“With Customer Journey Analytics, our customer journey analytics platform, we have a lot of purpose-built components that are powered by our Experience Platform, which has been a complete native build over the last several years for all of our acquisitions in the space to then tie into natively,” Smith said. “You’ve seen a lot of other vendors make massive acquisitions to build out these marketing cloud portfolios and we’re the ones that have actually developed a platform to actually do that, because, at some point, you run out of duct tape and baling wire to make all this work.”

It’s this custom platform that then allows the team to feed data into the new experimentation feature. As Smith noted, this also means that developers can work with any of their existing tools to build these tests, too.

Adobe also build a new integration between Customer Journey Analytics’ ability to discover customer segments and its Customer Data Platform [CDP]. “You can actually share any audience that you discovered in Customer Journey Analytics to the CDP and then take action on that in any system,” Smith explained. “For us, this is a really exciting moment […] to see not just insight discovery but insight activation, ultimately.”

Marketplaces are the order of the day when it comes to selling online, providing a one-stop shop for shoppers, and for retailers looking to target as many would-be buyers as possible, while also creating more economies of scale in areas fulfillment and delivery. Amazon has become the name synonymous with marketplace selling, but it’s far from the only player in town. Today, a startup called ChannelEngine, which helps retailers connect with and sell through more than 200 marketplaces, is announcing a growth round of funding to continue building out its business amid strong demand. The startup — based out of Leiden, Netherlands — has raised $50 million, funding that it will be using both to continue expanding the number of marketplaces it works with, the number of retailers that it connects to them, and to work on building out what the next generation of e-commerce will look like for all of them.

Atomico is leading the round, with new investor General Catalyst, plus previous backers Inkef and Airbridge Equity Partners, also participating; along with Stephan Schambach, the founder of Demandware, Intershop and NewStore, coming on as an angel investor.

Valuation is not being disclosed but as a marker of how the company has been growing at a profit up to now, it was founded in 2013 raised only around $7 million before this round, most recently doubling revenues in the last year on a base of over 450 retailer customers, with the list including the likes of Bugaboo, Staples, JBL, Polaroid, Hunkemöller, Brabantia, Reckitt Benckiser, Bosch, JDE, Electrolux, Philips Domestic Appliances, Signify, Diadora, Glanbia, Oneill, and Safavieh. (It’s not disclosing revenues, or valuation, with this round.)

The rise of ChannelEngine comes not just at a time when e-commerce has really come into its own — the pandemic drove many companies and people to selling and buying online — but specifically the rise of the marketplace as a key component of that online buying experience. Amazon has made a killing in the world of e-commerce by way of its Marketplace: aggregating millions of retailers in one place creates a one-stop shop for those looking for goods, and retailers can lean on Amazon’s economies of scale not only to sell to those shoppers, but to distribute and deliver those products, too.

But Amazon is just the tip of the marketplace iceberg. eBay, Walmart, Zalando, Mercado Libre, AliExpress, Back Market, Shopee, Lazada, Mirakl, Bol.com, Allegro, CDON, Cdiscount, Catch are examples of the many other generalist and more localized storefronts out there for retailers to leverage when targeting consumers. Even Macy’s has moved into the marketplace model.

“They are all becoming marketplaces,” said ChannelEngine founder and CEO Jorrit Steinz.

The challenge up to now has been trying to set up relationships with each and every marketplace, and that is what ChannelEngine tackles with its platform, providing a set of tools that will help retailers adjust pricing based on the site and audience and what’s selling for what (automated repricing in the parlance of the trade); handle their content, stock and order management; and connect with third parties to handle further analytics and delivery.

The company currently manages distribution for some 6 million products from 8,100 brands across more than 200 sales channels.

There have been other approaches in the world of e-commerce to help smaller retailers navigate growth amid the choppy waters of marketplaces. One of the most ubiquitous from a funding perspective at least has been the rise of Thrasio-style aggregators, e-commerce roll-up plays that promise better economies of scale to smaller brands by way of scooping them up and working with them as a more cohesive, scaled-up group to better leverage sales data, as well as manufacturing and distribution networks. Interestingly, Steinz tells me that a number of these are actually ChannelEngine’s customers: many promise to help their brands sell better on marketplaces, but in a lot of cases, their expertise is more in identifying the most successful retailers and helping them on specific marketplaces like Amazon, not actually working across multiple platforms: that is technology they often buy in, working with the likes ChannelEngine to fill out that business opportunity.

Interestingly, that also potentially makes a company like ChannelEngine, combined with other tools like headless commerce builders and those that help companies design and run their own storefronts, an alternative to selling up to a bigger brand.

Longer term, Steinz noted that other opportunities on the horizon will likely include not just more marketplaces but more non-commerce platforms for selling that become de-facto marketplaces, such as Instagram and TikTok, as they integrate more direct selling tools and better ways to discover what is being sold on their platforms beyond algorithmic inline ads. Altogether, the e-commerce market is being projected to reach $5.9 trillion by 2023.

“The COVID-19 pandemic dramatically accelerated the adoption of e-commerce, which now accounts for 20% of all global retail sales. The global e-commerce market is expected to grow by over $500 billion between 2022 and 2023 alone,” said Atomico principal Luca Eisenstecken in a statement. “By building the largest e-commerce operating platform, ChannelEngine is set to capitalize on this opportunity by giving brands and retailers instant access to the global marketplace.” She is joining the board with this round.

“As the use of e-commerce continues to accelerate, retailers and brands have to meet consumers where and how they shop. ChannelEngine has built out a complete, tech-first platform that’s both robust and global. General Catalyst is excited to invest in ChannelEngine as they help leading e-commerce companies sell on marketplaces worldwide,” added Larry Bohn, managing director, General Catalyst, who is also joining the board, along with GC’s Max Rimpel.

While working her way through grad school, Opaper founder Joan McIntosh ran an online bakery. “I would wake up at 3AM, 4AM, go to a commercial kitchen and go door to door, delivering food or putting it in grocery stores.” After graduating, McIntosh’s professional life became decidedly more high tech—she was senior product manager for data and machine learning platforms at Streetlight Data and then Lacuna Technologies. On a return trip to Southeast Asia (McIntosh was born and raised in Indonesia), she observed the rise of social commerce, or people selling through social media like Instagram and WhatsApp, and was surprised to see it was similar to all the manual work she had put into her online bakery years earlier.

“Everything was the same with how I did it,” McIntosh said. “I was just so baffled after working in tech for so many years, like why has nobody improved the process? Why is it still very manual? Why are you sending sellers payment, and then proof of payment like screenshots of bank transfers?”

While at Streetlight Data and Lacuna, McIntosh worked on products that optimized pricing, logistics and the supply chain, or “making sure that things are moving the right way, at the right speed, at the right cadence,” she said. Opaper was launched to give social commerce sellers the same type of convenience. After building a minimum viable product that allows social commerce sellers to create an online store, Opaper started onboarding users and raised an oversubscribed seed round of $1 million.

Investors include Precursor Ventures, Ratio Ventures, OnDeck, and angel investors Jay Eum, managing partner of GFT Ventures; Bora Chung, chief experience officer at Bill.com and Frank Nawabi, executive at Google and founder of Google-acquired Tenor, last year. Then it built a fully-remote team of 27 people in less than a year.

Now Opaper is available on Android and iOS and just four months after launching, has almost 19,000 sellers in 100 cities onboarded.

It targets small vendors, usually one or two people, who are at the point where they have about $2,000 to $5,000 USD gross merchandise value and want to scale, but can’t because they are busy answering questions and taking orders through WhatsApp. “They need time to focus on their product and think about how they can have an offline stores or maybe how to do franchises,” said McIntosh. “Those are the types of customers that we get to focus on more and more these days. It’s not somebody who already has three outlets. It’s somebody who has already started and is screaming ‘how to scale, how to scale?’”

While Opaper isn’t targeted to any particular sector, McIntosh said the majority of the businesses it works with are food and beverage companies, including ones that want to avoid the high commissions of third-party delivery apps. Opaper is integrated with 13 different shipping carriers that sellers can offer to their buyers, as well as e-wallets and bank transfers for payments.

For customers, Opaper means they don’t have to message back-and-forth with sellers, picking what goods they want, arranging payment and delivery. Instead, they go to the Opaper link in the seller’s profile and add things to a basket like any other online store. But Opaper doesn’t just make it easier for people to order goods on social media. It also lets sellers “own the direct to consumer experience,” McIntosh said.

Opaper lets seller keep track of that kind of customer data, so they can use it for re-engagement and re-targeting. Overtime, it also plans to build more supply chain and inventory management tools for sellers, since many social commerce sales are pre-orders. “When I was a bakery owner, I wanted to make sure I knew how much a person was buying so I could retarget them with coupons or loyalty points. It’s something you don’t really get easily from [third-party] marketplaces,” she said.

After launching its service in the U.K. late last year, Gopuff is officially expanding to Europe starting with France. In addition to the Paris area, the instant grocery delivery service is now live in Marseille, Lille and Toulouse. There are more European countries on the company’s roadmap, such as Spain.

For today’s market launch, the company is taking advantage of its acquisition of Dija — Dija had already soft-launched its service in France before Gopuff acquired the European startup. Gopuff has a ton of cash on hand as it raised $1 billion last year and is in the process of raising $1.5 billion.

Just like in other markets, the company operates a network of 20 dark stores with around 4,000 different products. Customers can order groceries, household essentials, alcohol, ice cream, diapers, iPhone chargers, you name it.

Gopuff also tries to partner with local brands to customize its offering to local customers. In France, it means that you’ll find fresh baguettes from La Parisienne as well as beers from La Fédération Française de l’Apéritif.

In France, Gopuff will compete with quite a few companies in the space, such as Flink, Gorillas, Getir, Zapp, Cajoo and more.

And yet, in an interview with TechCrunch, Gopuff’s co-founder and co-CEO Yakir Gola was quite confident in his company’s ability to execute well and become a market leader.

“The reason why we’ve expanded to Europe is because the customers have demanded it,” he told me. “We only come into a market once we’re really ready to win.”

According to him, Gopuff in particular has the best technology stack — both on the consumer side and rider side — to operate this kind of service at scale. It also has quite a big team already with 2,000 people working for Gopuff in Europe already — in France alone, there are 600 Gopuff employees.

When asked about the company’s performance in the U.K., its first foray outside of the U.S., Gopuff is satisfied with its current growth rate. “We’re probably close to becoming the number one from a ‘daily new users’ perspective in the U.K.,” Gola said.

While instant delivery companies generate a ton of headlines from their big funding rounds, Gopuff thinks it isn’t successful because it has raised a lot of money. It can close big rounds because it is working well.

“If you look at a market like Philadelphia we have a double-digit penetration of the market — double-digit percentage of the people living there are Gopuff customers. But the market is also growing by double-digit rates year on year,” Gola said.

“We can take the profits from existing markets and reinvest them into new markets like Europe,” he said earlier in the interview.

There are many challenges ahead for this nascent industry. In addition to heated competition, some local governments have been working on strict new regulations against instant delivery services.

“The approach that we have taken as Gopuff — as a market leader — is a very different approach. Considering what we’ve done in the U.S., we’ve been very proactive with local governments,” Gola said.

He admitted that Gopuff is trying to profoundly transform the grocery sector. “Look we’re disruptors,” he said. But he also candidly added that Gopuff is making the world a better place.“We’re changing people’s lives for the better and we’re doing it in the right way by partnering with neighborhoods,” Gola said.

Some consolidation is afoot in the world of moving and storage startups: Clutter and MakeSpace, two erstwhile rivals in the market, are merging to form a single company, which will operate under the Clutter brand, serving some 6,500 towns in the U.S. that together cover about 60% of the total population in the country, with operations also in Canada, covering services like on-demand moving, storage, self-storage, and disposal.

Financial terms of the deal are not being disclosed, Clutter founder and CEO Art Mir told me in an interview, but he confirmed that the company combined will be clearing close to $200 million in revenue annually, that it will break even this year, and that it’s planning for an IPO in 2023. Mir will continue with his role and will also be CEO of the merged business, while MakeSpace’s CEO Rahul Gandhi will become president.

The combined, enlarged Clutter does not have any plans to raise any more funding before then, Mir said. It’s unclear how many employees will be at the combined company. Clutter has around 1,000 and Mir said they made offers to some but not all MakeSpace employees to join the merged firm. Both companies operated on a model of employing all of their delivery drivers, rather than employing gig workers.

“It was a natural culture fit for us,” Mir said.

I have confirmed that Clutter was valued at around $580 million when it last raised money, back in 2019, a $200 million round led by SoftBank. MakeSpace last raised in 2021, a $55 million round when the pandemic was well under way, with its investors including strategic backer IronSource and a number of others. MakeSpace has never disclosed its valuation. Both companies have grown since then.

Mir said that the deal caps off a long-held ambition of his to make Clutter a consolidator in the space and he’d been eyeing up MakeSpace for a while now.

“I’ve always been a big fan of building relationships and have been working on the relationship with MakeSpace for years now,” he said in an interview. He said he’d periodically reached out “once or twice a year” before the latter company finally bit. Indeed, I heard about this deal going down several months ago, although both companies declined to comment on the situation at the time.

The deal underscores a couple of bring trends that are moving the market, one that is estimated at $38 billion for storage alone annually.

One of these is the effects of the pandemic.

Covid-19 has been a period of social distancing and staying put, but not for everyone: a lot of us took the moment to pause, think about how and where we are living, and in many cases take action by relocating, downsizing or simply rethinking our living spaces. All of that has had a big impact on companies like Clutter and MakeSpace, both of which saw business continue to grow in the last two years. Clutter, Mir told me, was designated an essential service and continued all operations as normal, while MakeSpace’s Gandhi told me last year that it was outpacing its growth forecasts for the period by 30%.

The other is economy of scale.

As with any logistics-based business — the wider category of e-commerce being one prime other example — ultimately the most successful players are those that have grown to a big enough size that they are maximizing their network of operations with as many customers and orders as possible for the best margins on that model.

That is very much the case here, too. Clutter, Mir told me, was profitable in its bigger markets but not everywhere; this merger will give it, and MakeSpace, the ability to aim for positive unit economics and better margins in more places. And, it will also cut out one more competitor in places where they overlapped, meaning less money to spend on marketing and promotions.

This is not Clutter’s first acquisition and consolidation move. It acquired The Storage Fox in 2019 for $152 million also as part of that strategy. It also bought assets from failed storage startup Omni in the same year, and has also picked up assets from Handy, Livible, Shed, and Callbox. MakeSpace has also been doing some consolidating, acquiring Stashable from Iron Mountain when it raised its Series D led by the business storage giant.

Amazon rules the roost when it comes to e-commerce, not just because of its size but because of how it uses that to amass large amounts information that it in turn uses to continue feeding the machine with sophisticated product recommendations, relevant advertising, and more to keep people finding things to buy, and buying them. Today, a Stockholm-based startup called Depict.ai that has also built a product recommendation tool — which it believes can help any retailer sell like Amazon — is announcing funding of $17 million to feed its own growth in the U.S. an Europe, after picking up 60 customers including Office Depot and Staples.

The Series A is being led by Tiger Global, with Initialized Capital, EQT Ventures, Y Combinator, and a longish-list of high-profile angels. It follows a seed funding round of $2.8 million that the company raised last year from Initialized, EQT Ventures, Northzone and Y Combinator, where Depict.ai was part of the first cohort to go through the program during a Covid-19 lockdown.

As CEO Oliver Edholm  (who co-founded the company with CTO Anton Osika) describes it, Depit.ai’s basic premise is that Amazon’s algorithms work so well because they have so much data on their platform about what you, and people similar to you, are buying. On a platform with millions of products, it gives Amazon the power to figure out what to show you, and also what to stock and develop as product categories, and how to price those products. That’s a paradigm that most other retailers have adopted too, he said.

“This is the same system that everyone else has adopted, but they are usually only looking at their own historical data,” Endholm said, which will never be as extensive as the dataset that Amazon has, and also doesn’t provide information about active purchases.

Depict.ai’s solution has been to amass a much bigger trove of information by aggregating data from across the internet; building its own deep learning-based platform to “read” it in relevant ways (for example in a search for recommendations after someone searches for a dress, identifying data that relates to other dresses, rather than to models that look like the model in the initial search a customer made); and then ordering it to fit searches made on its customers’ sites, to produce relevant recommendations.

It amasses the data initially by scraping a wide array of sites across the web, Edholm tells me. Scraping has had its share of controversy — a number of sites go to great lengths to make it hard or outright prohibit it, and some have gone so far as to take legal action against those who scrape — but Edholm notes that it’s not illegal and is actually quite standard practice in the world of commerce.

“We train on scraped quantities of data from the web, but a lot of models that do that,” he said. “You can learn pretty good abstractions.”

And, in any case, Depict.ai is scraping such a wide range of sites that even if one or two or 10 blocked it, there would still be a huge trove to tap, and Depict.ai already has amassed a huge amount of data.

“We’re not dependent on any specific site like LInkedIn or Craigslist,” he said, referring to two platforms that have been extensively scraped over the years for primary data that gets repurposed by others. “We generally want to find a lot of e-commerce product information and there are a lot of ways to do that, so I’m not worried about blocks. And we’ve already trained our models and can do it again and can drastically change the data set if we need to.”

The recommendation engine then can be integrated into its customers’ backends by way of an API. It claims that its tech can increase customers’ e-commerce revenue by between 4% and 6% “without needing any sales data at all.”

Catch Edholm if you can

Edholm’s resourcefulness and willingness to quickly change up the means to achieve Depict’s ends is a trait that is actually part and parcel of the person himself.

A computer whizkid, Edholm is a self-taught programmer who first got interested in coding after building customized Minecraft experiences as a 12 year-old. He then moved on to building mobile apps after realizing that they, like Minecraft, also used java.

After finishing middle school, Edholm left formal education and turned to home schooling (he credited his parents multiple times for being “super open minded” during our interview; boy, are they). He first came up with the idea for Depict.ai when he was working as a data scientist at Klarna, the buy now, pay later e-commerce powerhouse also based out of Stockholm, where he first started working when he was only 15. (Klarna had to pull a lot of strings to get him working there, he said, and he describes his work there perhaps because of that as “consulting.”)

While there, he became obsessed with artificial intelligence.

“What was super clear was that modern machine learning needs tons of data to function properly,” he said. “When you think you have enough, even more is better. That’s how modern machine learning works. But in e-commerce Amazon has a monopoly on data. The rest of the e-commerce industry doesn’t have the same alternatives. They u lack the quantity of data of an Amazon.”

But between noticing and figuring out (using AI) how to fix that gap between Amazon and the rest of the commerce world when it came to product data, and actually starting Depict.ai to turn that into a business, Edholm had another detour.

When he was 16 he’d saved up enough money from his Klarna work and selling apps in the app store, and he up and bought a ticket to Singapore, where he decided he needed to live to build a different startup: an AI-based accessibility platform for the web, to help those with visual impairments experience the internet.

Singapore was in his sights, he said, because he’d read a few research papers about accessibility that were published by academics in the country on the subject, so he thought that it would be best to be on the ground there to build out his ideas.

“I was very naive. I was inspired by the film Catch Me If You Can,” he said. “I understand that it was dramatic for my parents. I guess I have a track record of booking spontaneous flights.” (In fact, my interview with him was conducted while he was not in Stockholm, but Antwerp, Belgium — where he’d spontaneously flown that morning to try to woo a potential hire that he really wanted to join the team.)

He stayed in Singapore for six months on a short-term visa working on the idea, financing his time there by doing more consultancy work. Eventually he realized that it would be a huge challenge to build this out as a business. (Indeed, I think such products probably do have currency, but perhaps more as platform plays than accessibility-as-a-service for end users.)

So, for a Plan B, he also applied to join Y Combinator, now to work on Depict.ai, which had yet to launch. By the time he got a slot to interview, he’d moved back to Stockholm, but hadn’t told YC, so in fact had to fly back to Asia, to Bangalore, for the actual in-person meeting before eventually getting accepted, only to eventually go through the program remotely because of Covid-19.

Since starting Depict.ai, Edholm’s own star as an individual and founder of renown has only gone up: no surprise here, but he’s also now a Thiel Fellow.

Edholm is now only 19, and reading through what he’s done so far, it’s hard to imagine him sitting still for too long, but with Depict.ai still in the building phase, there is a lot of potential still to tap. For starters, it can pick up more customers. It can also diversify what it uses its data for, both to serve e-commerce companies but also in applying that same framework to other verticals.

In that regard, it’s interesting to see an investor like Tiger leading this round. The VC has increasingly been appearing in smaller, earlier stages of funding — in contrast to its early days and perhaps highest-profile investments where it sinks hundreds of millions into already-scaled businesses. The idea here is that Tiger itself is also learning more and wanting to get in on the ground level to make better returns on bets that it thinks might be good ones. In this case, that could just as easily apply to backing Depict.ai as it could to backing Edholm himself.

“Depict.ai’s AI-based product recommendation platform, is completely novel because it does not require historical sales data, enables online retailers of any size to deliver high-quality recommendations, a key driver of increased revenues,” said John Curtius, Partner, Tiger Global, in a statement. “We believe Depict.ai’s technology is poised to be a leader in this space, and we are excited to partner with Oliver and his team as they continue to expand into new markets.”

“At EQT Ventures we generally observe two trends in e-commerce innovation. Entrepreneurs either build tools to “arm the rebels” or create services for incumbents to keep up with the speed of more nimble players. When meeting with Oliver and his team we immediately bought his vision of providing top-tier product recommendation for the masses. Multiple members on our team have experienced the problem first-hand as founders, the Depict.ai technology is both a direct enabler of revenue growth and a time-saver from a development capacity standpoint. We’re excited to continue backing them on their journey from seed to Series A and beyond as they build one of the future giants in the e-commerce infrastructure space,” added Rania Belkahia, a partner at EQT Ventures.

(The angel list includes Fredrik Hjelm, CEO & Co-founder of Voi, Johannes Schildt, CEO & Co-founder of Kry, Carl Rivera, CEO & Co-founder of Tictail, Erik Bernhardsson, creator of the Spotify recommendation engine, Northzone, Nicolas Dessaigne, CEO & Co-founder of Algolia, Vidit Aatrey, CEO & Co-founder of Meesho, Joshua Browder, CEO & Founder of DoNotPay, Finbarr Taylor, CEO & Co-founder of Shogun.)