Salsify secures $200M as the boom in e-commerce catapults its valuation to $2B
E-commerce is booming, but it’s become increasingly apparent over the years that the businesses that are able to capitalize on that trend — and contribute to that growth — are those able to grasp the right technology to navigate the space. Today, Salsify, one of the startups building e-commerce solutions to that end, is announcing a big round of $200 million, a sum that speaks both to the demand in the market, and its success to date.
“It’s been very busy,” CEO and co-founder Jason Purcell told TechCrunch in an interview. “The thing that catalyzed us in first place was the idea that multichannel commerce would become big, and in the last two years COVID has made that trend abundantly clear. We have doubled in size.”
Salsify’s platform is aimed at retailers, brands and the various partners they work with to tap into centralized inventory and product information, data that can in turn be used to power more unified experiences wherever those products are sold. (Its favored term to describe this is the “digital shelf,” a reference point I think to the many companies it works with and their huge legacy businesses selling CPG goods on physical shelves.)
In 2021, ARR went up to $110 million and the company now has 1,200 customers, up from 800 when I last spoke with it in 2020. The list includes huge names like Coca-Cola, Libbey, Kraft Heinz, Columbia and Mars.
This is a Series F and it values Salsify (named after the widely spreading wildflower) at $2 billion. That is a notable jump since the company didn’t disclose a number when it raised its Series E, a $155 million round in 2020 (PitchBook however puts it at $805 million, and before at $308 million in 2018). This latest round is being led by TPG, with Permira’s Growth Opportunities Fund, Neuberger Berman Funds and Cap Table Coalition also participating. It has now raised more than $450 million.
In a venture market that is very active for e-commerce tech — just earlier today, another startup startup, U.K.’s Moot, that is building tech to help brands manage commerce across multiple platforms — announced $18 million in funding; last week another company in a similar space, Productsup, announced $70 million in funding — this round and valuation make Salsify one of the biggest contenders in this space.
And likely it is one attracting some attention from even bigger companies eyeing consolidation, although for now Salsify is focused on being the consolidator itself. Last year, U.S.-based (HQ in Boston) Salsify acquired SKUvantage and Alkemics respectively to expand into Australia and France.
“Big brands want to operate at scale and this allows us to go into new geographies,” said Purcell. It also has operations in Portugal and the U.K. Some of the funding will be used, Purcell said, to continue breaking into more markets.
The challenge that Salsify is addressing is a pretty big one that has only gotten bigger with the growth of e-commerce. Starting from the basic building blocks of retail such as inventory management through to payments and logistics, there is still too much fragmentation and complexity in how e-commerce works. On the other side, the most savvy companies are using technology that gives them a leg up in managing all of this, Amazon being perhaps the most shining example of that.
There have been dozens, probably hundreds, of tech companies built on the concept of arming the non-Amazons of this world with tools that help them compete with, and leverage, Amazon better. Salsify’s approach has been to tackle the problem as “experience management” (which it abbreviates to XM and attaches to each of its different product lines), and to look at it in the big picture, in terms of how it applies not just to brands but also retailers and the different companies that work in that complex supply chain, which all need information to do their jobs, but also potentially can provide critical insights (e.g., around inventory) to improve how the bigger process works.
That platform and wider integration functionality is also something that speaks to how bigger brands have seen that they need to work in modern times — gone are the days where their legacy supplier relationships and physical sales channels are enough in competition with newly emerging D2C competitors that leverage new platforms like social media apps and influencers to connect with new consumers.
It’s also why investors have come running to the company. Purcell described this latest round as “opportunistic,” in that the company still had capital from its last round in the bank but had been getting approached by investors looking to work with the company.
“As consumer behavior shifts increasingly toward digital and omnichannel, there has been an evolution in the way that brands think about their technology strategy and how they evolve their tech stack,” said Arun Agarwal, managing director at TPG, in a statement. “Through its integrated platform, Salsify is optimizing the shopping experience for brands, retailers and distributors, powering consumer interactions and enabling consistency, simplicity and agility. TPG has a long track record of backing leading SaaS companies, and we look forward to partnering with Jason and his team to drive Salsify’s growth and market leadership further.”
Salsify is by all accounts an inspiring startup with spurring development of software development platform. I’m certain this startup would keep on flourishing in its excursion ahead. All the best to the whole group of Salsify. This will give them a colossal achievement in the future.Shishir Gupta, Founder and CEO, StartupLanes
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