Everstores, an Open Store-style D2C Shopify aggregator outside Europe, comes out of hiding with 18 million euros • TechCrunch

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A wave of Amazon merchant aggregator startups, floating nearly $15 billion in funding, have been rushing, rolling, and rushing into the e-commerce market over the past few years. Now, a new tide and a new view of the model seem to be rising. Today, a Berlin startup called Everstores – which finds, buys and consolidates Shopify-based direct-to-consumer businesses, says it raised 18 million euros ($17.5 million at today’s rates) in funding, money it will use to continue to invest in its data science and operational tools; and to acquire and consolidate the D2C brands.

Quietly, he took over three companies and – according to co-CEO Kristoffer Herskind (who co-founded the company with two others, Carlos Lopez as co-CTO and CTO Kirill Martynov) – some 100 million data points on the other 500 Shopify-powered D2C brands that have signed up as potential acquisition candidates.

Now, armed with €8m in equity and €10m in debt, the plan is to increase that number with a more public launch. Earlybird Venture Capital leads the equity leg, while Viola Credit leads the debit leg, which we believe is structured as an “accordion” of up to €50m. Pre-seed investor Picus Capital, Founding Angels and KKR & Goldman Sachs also participated in the financing. The company has now raised €20m in total, including an earlier pre-seed round.

If the Everstores business model looks a bit familiar, that’s because it’s not only similar to the previous aggregator model, but nearly identical to the latest twist on the idea, which is also being pursued by OpenStores, a American startup launched in 2021, which itself only announced a major funding round last week that catapulted its valuation to nearly $1 billion.

The rapid growth of OpenStore speaks of competition, but also validation for others in the same field like Everstores. There are thousands of businesses building storefronts based on Shopify, in total nearly $200 million in GMV per year (Shopify’s GMV last quarter was $46.9 million), and many of them have hit the wall when it comes to scaling.

The argument here is that Everstores (or OpenStore, or others) can provide capital to the owners of these D2C brands and apply economies of scale to all the different and potentially expensive aspects of running an e-commerce business. – supply chains and logistics; big data analysis; personalization and other technologies – to do what small individual stores would have found difficult, if not impossible, to do on their own.

Herskind’s reference to the amount of data his company has already accumulated is notable for several reasons. First, he talks about the company’s central thesis of why this business model is better than yesterday’s aggregation game characterized by Thrasio, SellerX and others, which is based on collecting Amazon-based businesses: The data that can be obtained from Shopify businesses is inherently much more comprehensive, and therefore better.

“It’s all about data,” he said in an interview. “On Shopify, merchants have information about their customers because they own the customers. On Amazon, you have product and order data, but you don’t really know who your customers are. That’s the fundamental distinction And without knowing who they are, it’s hard to know the true cost of acquiring customers.It also makes it difficult to evaluate these businesses, and subsequently scale them.

And he thinks there are other market-specific reasons why independent online businesses are better candidates for aggregation and consolidation than Amazon-based merchants.

For one thing, Amazon is already doing a great job in areas like supply chain management and logistics, which leaves little room for improvement. “It would be difficult for us to do anything to improve operationally,” he said.

On the other hand, taking a series of Shopify-based businesses, many of them still use a combination of services to meet marketing, supply chain, inventory, and logistics needs. Horsing estimated that for B2C e-commerce businesses, between 20% and 30% of their costs are related to marketing in both e-commerce and B2C, so there is an opportunity to create more efficiencies there.

The other interesting point to note about Everstores’ data is how much it already has – 100 million data points currently – although it has only selected three companies so far.

Herskind said that since opening its platform in private beta, some 500 companies have logged in and registered their information to begin providing data to Everstores to be part of Everstores’ assessment of companies. . It speaks to the demand among them to look for an exit, but surprisingly how open these companies seem to sharing data on their performance.

Herskind notes that even in cases (most of them, in this case) where Everstores isn’t interested enough to enter an M&A process, he suggests keeping data streams open so that he can continue to assess the situation.

It also opens the door for the company to build other products using it, reminiscent of companies like Xeneta, which has also turned outsourced third-party data into a thriving business in the world of shipping pricing.

It’s worth watching if Shopify merchants are really all eager to sell, or if this is just a hangover from the previous incarnation of roll-up games. Herskind said the market was so heated for FBA-based merchants that businesses that might have initially been considered 2-3x earnings (Ebitda), strong competition at the top of the market drove those multiples to sales at 8 to 9 times the profits. . Have aggregators learned their lesson from this, or will the same bloated pattern repeat itself, that is the question for both traders and aggregators themselves.

“This [inflation] also shattered the business model,” Herskind noted.

Something very common between old and new incarnations of aggregators is their insistence that they bring a lot of technology into their otherwise fairly obvious financial games.

“We approached everything from first principles and with the fundamental belief that technology could drive better outcomes across the board. We are excited to work at the frontier of this space, and we are bringing together the smartest engineers and data scientists to solve these open problems with us,” Martynov said in a statement.

“We believe D2C is a fundamentally attractive opportunity where structural problems in the space can be meaningfully addressed through data and software. Everstores’ technology platform enables both the identification of brands with the highest potential and fully realize this potential through their operating system. We are proud to support the founders of Everstores in their mission to unlock the D2C asset class at scale through their cutting-edge technology platform,” said said Tim Rehder, partner at Earlybird, in a statement.

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