New Investment: Shopify
One of the key trends we have been following at FirstMark is next generation retailing and e-commerce. We’ve seen rapid adoption of consumers buying online across categories, and it’s no longer controversial that people are willing to buy even complex items physical sight unseen. We’ve seen new business models like flash sales, Netflix-style rentals, and direct producer to consumer relationships blossom. The Internet allows for sourcing, curation, and selling on a level unparalleled. All in all, we are in a golden period for retailing online.
With this renaissance in e-tailing, we noticed most of the e-commerce platforms out there were significantly dated. Many had not changed for over a decade, offered very little flexibility, and did not take advantage of the incredible advances in software we have seen in that period of time. But we found one – Shopify – which we are extremely excited to announce as our latest investment.
Shopify is a unique retail platform company that allows merchants to have an online store up and running in 20 minutes, but with a unique app store model that allows it to also service the highest end commerce providers. There are some interesting applications on the platform today, but the goal is to rapidly build out the ecosystem so a retailer can find everything they need to run their business – online marketing, billing, inventory, logistics, supply chain, mobile, etc. With this approach, we should satisfy any retailer from small to large with a consistent platform and a best of breed set of options.
Shopify was founded by Tobi Lutke several years ago as he and his friends wanted to launch their own snowboarding store. They found most of the alternatives out there very kludgy. Fortunately for the rest of us, they are renowned Ruby On Rails core contributors and developers, and so they decided to build their own store. They opened the platform for others in 2006, and have surpassed $100MM in Gross Merchandise Value with over 10,000 active stores on the platform a few years later. It’s a real business that is poised to power the next generation of retail.