Gian Maria Grammondi (left) and Luca Cartechini (right) always include US investors in their rounds because the startup ecosystem is stronger than in Europe, they say.
The Snapshot People Co., Ltd.
London-based e-commerce software startup Shop Circle has raised $120 million in Series A funding, the company announced Wednesday.
Shop Circle, led by Forbes Under 30 Europe listees Luca Cartechini and Gian Maria Gramondi, helps up-and-coming e-commerce brands start, grow, and sustain their businesses, including online store design and inventory management. We provide the tools you need. The funding, led by 645 Ventures and 3VC, brings the startup's total funding to his $140 million. The co-founders said the two-year-old startup has been profitable for 11 months, but declined to comment on revenue or valuation.
Shop Circle's growth coincides with a boom in the e-commerce industry as a whole. Before the pandemic, U.S. e-commerce was growing at 13% to 15% annually. However, according to Key Bank, it increased by 33% in 2020. This pandemic-induced growth now shows little sign of slowing. In 2017, 500,000 businesses sold on Shopify, and that number is expected to jump to millions by 2023, though Shopify declined to share exact numbers.
With the ever-increasing number of businesses and the proliferation of software that helps them grow, Cartechini and Gramondi saw new possibilities. They found that some merchants work with up to 35 separate app providers to address all their needs across software, supply chain, inventory, upselling, and marketing. explains Mr. Cartechini.
“Number of software” [tools] Spending by e-commerce brands has increased approximately five times over the past five years,” says Cartechini. “We wanted to centralize everything under his one brand, Shop Circle.”
Today, Shop Circle functions as a “suite” of tools, everything from referral programs to restocking alerts to mobile app builders, all under one umbrella. Shop Circle works exclusively with his Shopify sellers and provides them with his 37 different tools to build their business on Shopify.
“The number of brands has increased significantly, so competition has increased,” Grammondi says. “To be attractive to customers, a brand must excel in product, in conversion, and most importantly in retention.”
Shop Circle's various services address each of these areas, he says.
Emily Pfeiffer, principal analyst at Forrester Research, agrees that streamlining e-commerce software has potential. The business she advises The owners of her business are constantly frustrated by the number of databases they have to use. She also says that while previously it was enough for individual apps to “talk to each other” in the cloud or elsewhere, it's now important to integrate and integrate. That may be why Shop Circle is so attractive to sellers as a single vendor.
But Pfeiffer warns Shop Circle customers about the danger of “lock-in,” where customers become dependent on only one vendor, product or service. That's because it limits your ability to be agile when changes are ultimately needed.
“We used to be afraid of vendor lock-in, but now we feel less afraid of service lock-in,” she says.
It's important for small business owners and customers of platforms like Shop Circle and Shopify to understand how ecosystems work together and how to maintain them if these systems break. , she added.
In some ways, the Shop Circle team also feels dependent on external tools. 645 Ventures co-founder and managing partner and investor Nnamdi Okike said the co-founders and their investors are diversifying their customers into sellers on platforms like Amazon and other e-commerce sites. He says he is thinking about it.
Cartechini and Gramondi plan to put new investments into building a software development team and implementing more AI technologies, including automating the most common customer service inquiries, with the potential to diversify their customer base .
But Shop Circle still maintains a personal touch. The company recently launched a consulting program in which employees advise merchants on the best technology stack, or grouping of Shop Circle tools, based on their needs.
