The FBA Acquirer Frenzy Comes to Shopify
Plus Thirteen Boston Companies Raising Funding
The FBA Acquirer Frenzy Comes to Shopify
As usual, there’s more news in the world of eCommerce storefront aggregators — which have now raised over $4B in 2021 alone. But this time, it’s Founders Fund’s Keith Rabois becoming the 150th contrarian to start one 🤠.
Jokes aside, he and Atomic founder Jack Abraham have officially launched OpenStore to provide “instant liquidity” to eCommerce entrepreneurs. According to Bloomberg, they’ve also raised $17.5M from their respective day jobs and they anticipate raising more later in the year. They plan to acquire dozens of businesses over the next 12 months, targeting those with less that $5M in annual sales and ultimately creating an entity with $1B+ in annual revenue.
What’s interesting is Rabois is essentially CTRL+C and CTRL+V-ing the formula for his last startup onto a new industry. At OpenDoor, he figured out how to formulaically provide speedy cash offers to homeowners with little information. Now OpenStore wants to do the same thing, but with the storefront real estate on the internet.
Their approach slightly differs from that of the largest eCommerce aggregators like Boston-based Thrasio and Perch:
They’re going all-in on Shopify instead of Amazon. Unlike Amazon, Shopify doesn’t have a centralized “everything store” for their products. All sellers on the platform have their own unique real estate that’s enabled by Shopify. However, I also had no idea that Shopify already has an exchange where users can sell their businesses. It seems like they’re at least competing with Shopify’s internal product on speed. OpenStore claims they can extend an offer in one business day while Shopify says the average time to receive an offer on their exchange is seven days.
They’re building a self-service product where potential sellers talk to a chat bot to exchange information and ultimately receive an offer from OpenStore. This means the company isn’t wasting as much human time hunting for quality acquisition targets, but they’re still providing and receiving value. Sellers want to hand over data to the chatbot because they can get an actual valuation of their business in one day, which could be helpful for further negotiations with other buyers. Meanwhile, each seller interaction gives them an additional data point to incorporate into their pricing algorithm.
We’ll have to check back in with the company in a few months to see if they become another one of the many eCommerce aggregators to shatter fundraising and valuation records in the US.
Stuff I’m Reading:
Boston Tech Financing Rounds:
According to Reuters, Enterprise AI company DataRobot is in advanced discussions to raise $500M at a $7B valuation. This would be a significant valuation step-up following their $270M Series F at a $2.7B valuation in November of 2020.
Plant-based food producer Motif just raised a $226M Series B led by the Ontario Teachers’ Pension Plan Board and BlackRock. They’re developing plant-based ingredients that are meant to improve the flavor and texture of other plant-based meat and dairy products. Their first commercial product will be a muscle protein to improve plant-based meat flavor, built on top of Ginkgo Bioworks’ bioengineering platform.
UK and Boston-based Immersive Labs just announced a $75M Series C led by Insight Partners, with additional support from Menlo Ventures, Citi Ventures, and Goldman Sachs Asset Management. The company’s platform teachers cybersecurity skills to employees at large companies by giving them relevant and realistic examples of common cyber attack vectors and gauging their ability to spot attacks.
Zus Health 👩⚕️
Watertown-based Zus Health just announced a $34M Series A led by Andreessen Horowitz, with participation from F-Prime, Maverick Ventures, Rock Health, Martin Ventures, and Oxeon Investments. The company is working on a shared development platform that lets healthcare providers create more interoperable Health Tech applications. It’s founded by former AthenaHealth CEO Jonathan Bush.
Following an $11.3M Series A in 2018, MachineMetrics announced their $20M Series B round last week. The round was led by Teradyne, and joined by investors including Ridgeline Ventures, Tola Capital, and Hyperplane VC. They offer an industrial IoT platform that helps manufacturers analyze data coming from machines on their factory floor, which can help them figure out how to further optimize throughput. It’s similar to NH-based Datanomix, which also recently raised a $6M Series A.
A new filing shows that twelve-year-old OpenExchange has raised $17.2M in a $40M round. I last wrote about the company in June’20 when they raised their first venture funding since their Series B in 2013. The Lincoln-based company helps finance firms spin up reliable and secure video conference connections and live streams. Back in late 2019, they merged with KnowledgeVision Systems.
(Missed this last week). K-12 attendance management platform AllHere raised an $8M Series A led by Spero Ventures, with participation from Rethink Education, Gratitude Railroad, Potencia Ventures, Operator Collective, Yard Ventures, and others. They’re working on solving chronic absenteeism with AI chatbots that engage with students.
A new filing shows that the life sciences digital marketplace Labviva has raised $8M in new funding. The round is presumably led by Glasswing Ventures, with Glasswing’s MD Sarah Fay listed on the filing. The four-year-old company sits between researchers and lab equipment vendors to create a seamless purchasing experience that works with existing procurement software.
Correction: Upon press release, Labviva announced that the round was led by Senator Investment Group, with other investors including B Capital Group.
Back in January, I wrote about a filing showing social sports betting app Wagr raising $4M. That round has been publicly announced as a seed round led by Seven Seven Six, with support from Greycroft, Pear VC, and others. They’re making a simple sports betting app that removes the complexity and danger of placing bets while encouraging participation between friends. It’s led by CEO Mario Malave, who previously worked as a VC at Playground Global, along with Eliana Eskinazi and Adam Zimmer. Although, it looks like they’re making the move to HQ in Miami.
Three-year-old DTC wig company Waeve just officially launched with a $2M seed round led by Pillar VC, with additional support from Maveron, the founders of PillPack, and Glossier’s former COO. The specialize in both synthetic and human hair wigs for Black women.
Mobile banking FinTech startup Envel just raised $2M in crowfunding, bringing its total seed funding to $4.75M. They use AI to automatically allocate money into “envelopes” used for specific spending purposes. It also includes features like bill splitting, a gamified Money Management Score system, and physical debit cards.
Back in 2018, voice-optimization MIT spinout Yobe had launched with a $1.8M seed round. Now, according to a recent filing, they’ve raised $1.6M more. They use AI to take a biometric fingerprint of anyone’s voice so it can be clearly heard in very noisy environments, or so it can be used for authentication purposes.
Automated CCPA compliance platform Cytrio has raised $250K in a $1.25M round, according to a new filing. The two-year-old company helps platforms easily implement data privacy rights management for their users (right to know, right to access, right to delete, etc).