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 scale 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 Catalystplus 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 the 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 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 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 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 selling on marketplaces worldwide,” added Larry Bohn, managing director, General Catalyst, who is also joining the board, along with GC’s Max Rimpel.