December is the busiest time for online businesses, and therefore a timely moment to highlight innovative startups making waves in the e-commerce world. It’s forecasted that this year there will be $4.921 trillion in global e-commerce sales.
A big reason for this growth is the increased web traffic by smartphone and tablets. 6.37 billion people (80.63% of the world’s population) have a smartphone today which makes it easier to shop online, especially with shopping features such as ‘one-touch purchases’. Not to mention the quick pace of social commerce (shopping via social media), which makes it easier for individuals to shop, accounting for 3.4% of all e-commerce sales.
This month, our Campaign Development team share four e-commerce startups you need to have on your radar right now!
Eduard Steimle – Scale
The e-commerce industry has come a long way since the boom of the 90s and early 21st century. Back in the day, in order to have an ecommerce business, companies had to create their own infrastructure, logistic process and website. Nowadays, platforms such as Shopify or Wix allow anyone to set up their own e-commerce business in a matter of minutes.
This democratisation process in the industry allowed more and more players to enter the market with relative ease and speed. However, most of these market participants are small businesses with relatively limited resources and technical abilities. Therefore, they need to rely on external providers. As demand grew over the past few years for this kind of service, more startups have come to the scene to deliver plug and play offerings for e-commerces in areas such as logistics & inventory management, accounting services and funding options.
Business Score helps e-commerce businesses raise £3k – £2m to fund their inventory, marketing, hiring, and growth. They do this by showing which funding options are available to them in just a few clicks. Companies provide their information once, and Business Score does the rest. Multiple lending options are available such as Stock Finance, Revenue Base Finance and Invoice Finance amongst others.
Business Score was launched in early 2019 and to date, more than 500 e-commerce businesses have used the platform to get funding. As of now, Business Score receives more than £1m in funding requests per week.
The core team is led by Rich Serunjogi (CEO), who founded Business Score after running his own e-commerce business and working at McKinsey advising Global Company CEOs. Olu Omoniyi (CTO) worked for the United Nations and his NHS discounts app is used by 100,000s of key workers. Edozie Izegbu (Commercial Lead) is a serial entrepreneur with strong experience in Fintech and DeFi.
Business Score is backed by YCombinator (S19), LocaGlobe and ImpactX (amount not disclosed as of now).
Daniel Pawson – Venture
With British households adding a staggering 3.2 million pets to their households during the pandemic, millions of ethically conscious millennials have been seeking more sustainable pet food. An increase in young pet owners has seen a rise in demand for food that is not only good for their furry friends, but also good for the planet. Brands who have managed to position themselves amongst this, have seen fantastic results.
We have seen how popular pet brands are ourselves, with Seedrs portfolio companies such as fresh dog food company Different Dog who raised £1.3m at the start of pandemic to Percuro who raised over 750k mid 2021. These two companies have capitalised on changing consumer behaviour by forgoing the traditional retail route, to building a strong online presence and have seen their D2C sales boom.
With the Omicron variant taking a hold, I can see no slow down in the growth of D2C brands, with consumers choosing to shop online rather than in store. One exciting brand that deserves a mention is Pets Purest, amassing an impressive 500,000 customers and a revenue of £6m in 2021. They’ve created a strong portfolio of cruelty free products, from natural ear cleaner to sausage treats! They’ve just announced a six figure investment by newly set up Fearless Adventures, co-founded by ex social chain and social media expert Dominic McGregor. I expect to see the brand take it to the next level with this new expertise on board.
Katherine Gilroy – Diversity
One positive thing to have come out of the pandemic has been the change in consumer behaviour as they look to engage more with independent brands online, and order those products direct to their door. This has allowed brands that are not yet in the big retailers to get in front of more like minded consumers, and has allowed tech innovators to step up and connect those smaller, scaling brands, with those curious consumers.
One new player to join this space is Oja – on a mission to make foods from all cultures easily accessible from anywhere in the world. Starting with African and Caribbean foods, the platform has plans to expand to South Asian and Turkish foods and beyond. With limited offerings in supermarkets, and with younger generations being less willing or able to shop from physical markets and community shops, Oja is plugging this gap.
Founded by Mariam Jimoh, the online marketplace was founded in 2020 and ran a successful pilot with its MVP, achieving 67% repeat orders, 56% growth from word of mouth, and basket counts and sizes “exponentially rising as more products were added to the online store”.
The brand just closed a $3.4m pre-seed round led by LocalGlobe and, as reported by TechCrunch, an impressive roster of other investors including Acequia Capital, Tiny VC, black angel group HoaQ Fund and angels including the CFO of Sainsburys, the CPO of Booking.com, the COO of Trouva, the CEO of Taster, CEO of The Stack World, the co-founder of King.com and an angel with strong links to a large Asian food manufacturer.
Oja is setting out to build the first online supermarket targeting the country’s growing cultural communities. According to LocalGlobe “Mariam and her team are building a game changing company that is set to raise the bar for the underserved communities across London, the UK and Europe”. It’s early days, but clearly big things are coming. Watch this space.
Freddie Turner – Seed
As consumers worldwide continue to buy more clothes, the growing demand for fast fashion and new styles is taking a toll on the environment. On average, people bought 60% more garments in 2014 than they did in 2000. Fashion production makes up for 10% of humanity’s carbon emissions, dries up water sources, and pollutes rivers and streams.
Additionally, 85% of all textiles go to landfills each year. Washing certain types of materials sends thousands of plastic particles into the ocean.
The devastating impact that the fashion industry has had on the environment can largely be put down to the culture of fast fashion. Fashion is getting cheaper and cheaper, and people are consuming it faster than ever. Because of the low prices, customers end up treating their clothes like they are disposable.
Vintage Threads is a vintage clothing company looking to address the ‘true cost’ of fashion and provide unique hand-picked vintage clothing at reasonable prices. Founded in 2015 by two co-founders who met on a night out at University, Vintage Threads was set up after identifying a gap in the vintage clothing market for refined affordable clothes from a company people can relate to and engage with.
Vintage Threads specialises in a combination of old school sportswear and 80s & 90s designer pieces, showcasing items from a wide range of brands, including Nike, Ralph Lauren, Burberry, Fendi, Saint Laurént, Prada, Gucci and many more. With sustainability at the core of everything they do, the founders came up with the idea for the VT Rework collection: a concept where they rework items with minor defects that they find on their travels and turn them into truly unique pieces.
Since launching, Vintage Threads has developed a loyal fan base and has amassed a following of over 140,000 people on Instagram, who they keep engaged with their eye-catching content. We are looking forward to seeing the Vintage Threads growth plan and following their journey.
Antony Tikhonov – Europe
The last 5-8 years have seen a tremendous uptake in global e-commerce. Not only did it allow giants like Amazon to hold a stable position as one of the top 5 most valuable companies in the world, but it also provided a fostering environment for the development of e-commerce startups.
With the global pandemic accelerating the growth, the e-commerce market increased in value almost 10x since the beginning of 2020. Startups like YFood were able to benefit from the trend. The company was named one of the fastest growing direct-to-consumer startups of 2020 by Sifted.
YFood is a German startup that was founded in 2017. It produces and sells a full range of balanced drinking and powder meals that contain plenty of protein, vitamins, and minerals and enable consumers to gain constant energy throughout the day in a healthy manner.
The founders, Ben and Noël, were previously working together in the finance industry and were faced with a challenge of a lack of fast and healthy food. Not being able to find a good solution, they decided to build it themselves and founded Yfood with a mission to enable healthy nutrition in every situation.
Now the startup sells its drinkable and powder meals across multiple European markets. The company is financed well by external investors and has raised a total of £18.18m. The last financing round, Series B in April 2020, was led by Felix Capital and brought £13.56m of fresh funds to accelerate further European growth.
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As we continue to move into a digitalised world, the opportunities for e-commerce are endless. There’s also big opportunities for you as an investor to capitalise at this peak moment. View some active e-commerce campaigns here.
