Time to democratize eCommerce operations — why we invested in Hive Technologies 🐝
We are excited to lead the € 6.6m seed financing round of Berlin-based Hive Technologies alongside a syndicate of experienced early stage VCs and angel investors. Here is why we think the time has come for Hive to democratize eCommerce operations.
Amazon is not the way to go for D2C brands
When we think of eCommerce, Amazon is usually inevitable. Perhaps no other company has influenced the way we buy and sell consumer products more than Amazon in the past 25 years. Today, Amazon is the world’s largest online retailer with over $386bn revenue in 2020. Amazon has proven to be not just a powerful sales channel for consumer brands, but a destination allowing people to build small businesses on the platform. Fulfillment by Amazon (FBA) and the ability to reach millions of consumers in one place has made it an attractive option for small businesses to launch without the complexities traditionally associated with building a business, such as logistics and warehousing. While the FBA option offers one of the best fulfillment services in the world, it comes with a high price tag. Not only in terms of actual cost. Sellers on Amazon give up data about their products, as well as the entire customer relationship and customer experience. Thus, FBA and selling on the Amazon marketplace in general is not ideal for D2C brands that want to build a strong brand.
“While the desire to go D2C has been a long-term trend, we’re entering what we believe is the golden-age of D2C eCommerce enablement” (Accel, 2021)
Direct-to-Consumer (D2C) eCommerce is exploding
On the bright side, we are seeing more and more brands launching independently and building direct, personal relationships with their customers online. The significance of this trend becomes evident when looking at Amazon’s 2020 figures: for the first time in the history of the company, Amazon’s market share of US eCommerce has declined. While a growing awareness of consumers for independent brands plays a role, the driving force behind this trend are eCommerce enablement providers that allow sellers to gain back control over their products and customers. Shop platforms like Shopify, WooCommerce or Magento enable D2C brands to launch with minimal set up costs while Instagram and other social media channels allow efficient customer attraction.
Fulfillment is the heart of D2C — and it’s broken
Besides launching an online shop and marketing products, accurate and smooth fulfillment is absolutely essential for a D2C business. However, fulfillment for small-medium D2C brands is not easy these days. Why? Consumers demand Amazon-like quality with seamless, two- or even same-day delivery and easy returns. Additionally, individual packaging for an instagrammable unboxing experience has become a powerful marketing tool and is thus vital for many D2C brands. But most fulfillment providers are not ready for the wave of new D2C requirements and typically offer slow, expensive onboarding, little flexibility with high minimum volumes and 3+ year contracts, plus legacy warehouse management systems.
Hive is democratizing D2C operations
Starting with fulfillment, Hive is reimagining D2C logistics & operations. To allow D2C brands to focus on product, sales and brand building, Hive provides them with a technology-driven, scalable, and extremely efficient one-stop-shop fulfillment solution. This includes proprietary software and in-house logistics centers with all services across the entire value chain — from inventory management, to returns & custom packaging solutions.
And just as Shopify has integrated sales & marketing, Hive’s technology integrates additional D2C operations services like sourcing, delivery, analytics, and inventory financing. Services adjacent to fulfillment, such as shipping, already offered by Hive, enable its customers to reach more competitive cost structures holistically and account for a strongly growing share of Hive’s revenue. Ultimately, Hive’s technology will enable D2C brands to run their operations on auto-pilot.
Ultimately, Hive’s technology will enable D2C brands to run their operations on auto-pilot.
We strongly believe that if you want to provide an exceptional service to your customers, it’s vital that you have full control of assets and operations, which means you have to own and run the warehouses. This level of complexity demands a lot; it requires a particular team set-up that can master such challenges.
Having worked with Hive’s founders Oskar, Franz, and Leo, pictured above, we are convinced that this team has what it takes to succeed: a hands-on mentality without limits, a strong work ethic, out-of-the-box thinking, and 100% customer focus!
So, Team Hive, welcome to the #EBVCgang — we are excited to shape the next generation of eCommerce together! 🔥
To join us on this journey, check out Hive’s open positions here.
If you are a founder in the eCommerce or logistics industry, I’d love to hear from you! Feel free to reach out via paulina@earlybird.com 💌
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