The e-commerce boom that began with the Covid-19 pandemic shows little sign of slowing down, and today a company called Storewhich provides an open source toolset to power online shopping experiences for nearly 100,000 mid-sized and large brands, is announcing $100 million in funding to capitalize on the opportunity.
The money is notable not only for its nine-figure size, but also for its context. This is the first outside funding Shopware has ever raised — it’s been up and running and profitable since it was founded in 2000, when e-commerce was just getting started — and it comes in part from one big strategic sponsor: payments giant PayPal and Carlyle (for through its Carlyle Europe Technology Partners fund) are its first two outside investors.
“This funding will help us fuel our international growth – allowing Shopware to capture the significant opportunities ahead of us,” Stefan Hamann, co-CEO of Shopware, said in a statement. “As a company, we are proud to have been profitable from day one and are excited to be working closely with Carlyle and PayPal to build Shopware’s long-term positioning.”
Shopware is not disclosing its valuation, but notes that Carlyle and PayPal are stepping in as minority investors. Sebastian and Stefan Hamann — the brothers who co-founded Shopware in the modest (population: around 7,000) northwestern German town of Schöppingen near the Dutch border — will retain a significant majority stake in Shopware, the company said in a statement. . They will also remain co-CEOs.
So far, Shopware’s sweet spot has been serving mid-sized businesses and brands that aren’t necessarily digitally native businesses, but have had to embrace digital channels to keep up with the times and how consumers discover and buy products and services today.
In other words, the tools he built are there to help companies have a presence and compare themselves with the rest of the online landscape, but they are built with the goal of making them easy enough for non-tech companies and their partners. to use. His client list includes M&Ms and Haribo (finally justifying the use of the phrase “sweet spot”), electronics company Philips, Stabilo and many others.
The midsize segment has been underserved for years: larger companies often build solutions in-house or work with system integrators to build custom e-commerce backends; and smaller companies had/have a variety of website builders, purpose-built platforms like Shopify, and a plethora of marketplaces to sell online.
But as e-commerce continued to become more and more popular — and for a period of time during the height of the pandemic it essentially became the only game in town — not just the funnel of potential brands and businesses in need of help. to go online has become much broader, but companies that build tools to serve these customers have also increased in number. Shopware’s competitors now include Shopify Plus, Magento and others that create a mix of headless and other components that brands and others can mix and match to power online shopping experiences, whether through their own websites, mobile apps or through third-party platforms such as social media sites or marketplaces.
Indeed, the fact that there are so many touchpoints today underscores the complexity of the market, but also the opportunity. This is in part where PayPal fits into the picture. It is one of several payment providers that Shopware already works with and so the two already had a relationship. This investment will potentially mean Shopware will be a vehicle for PayPal to channel more of its latest initiatives as it looks to expand its own payments business beyond basic transactions. But from what we understand, that won’t stop Shopware from continuing to work with PayPal’s competitors.
“The last few years have accelerated the need for an open source approach that provides excellent shopping experiences for customers, and we are ready to take even more advantage of this growth opportunity,” Sebastian Hamann said in a statement. “We look forward to working with Carlyle and PayPal – two companies with strong experience in digital commerce – on the next stage of our journey.”
Shopware’s tools today include a platform where its customers can integrate the many other services that are bundled into e-commerce experiences (including inventory management, billing, and so on), a mechanism for building progressive web applications to run the front -end of a website, guided shopping tools and a business process automation builder.
The plan will be to use the funding to continue expanding these tools against the ones being built by Shopware’s competition, but also to explore some new and growing opportunities in areas like B2B – i.e. brands that sell not to consumers but to business users. . This will need its own dedicated investment to develop because, like its B2C counterpart, websites selling to business users have seen a boom in the last couple of years, but they have their own particular challenges, integrating complex workflows and dealing with omnichannel scenarios. different from those a consumer-focused company might encounter.