Latitude’s investment in Flow

With today’s announcement of Flow’s series B financing, we wanted to share a little about our excitement for what Rob, Mike and the Flow team are building, and why this represents a quintessential Latitude investment.

We launched Latitude in 2018 with a simple notion, that by building on top of the platform and reach of our seed-focused sister fund, LocalGlobe, we could create a different type of Series B+ fund. One that would be able to access a rich seam of world-class founders in situations where we have materially differentiated access and insights.

We’ve known Rob Keve, co-founder and CEO at Flow, for many years. My Partners, Robin and Saul, backed Rob in his previous startup, Fizzback, from seed through to exit to Nice Systems in 2011. This followed a long friendship with Rob going back to the 1990s.

In 2015, Rob let us know that he was launching Flow with co-founder and CTO Mike Bryzek (previously co-founder/CTO at Gilt Groupe). Once Rob and Mike set up the Flow headquarter in Hoboken, New Jersey, three things became rapidly clear to us.

First, this was a team we had to back. Simple as that. Second, their plan for Flow was firmly in our wheelhouse — cross-border e-commerce technology — more later on this. Third, Flow would inevitably double down on Europe in time and we could be a meaningful on-the-ground support when this time came.

The future is inevitable

All investors love a large market. Now, find a large market with anachronistic internet 1.0 infrastructure. Then add >25% annual market growth until the end of the next decade.

Welcome to cross-border e-commerce.

It’s 24 years since my Partner, Robin, did the first e-commerce transaction in the UK (true fact). Nearly a quarter of a century later it amazes us that buying online from retailers and brands beyond your shores can still be such a scratchy, inconsistent experience.

However, providing a seamless cross-border transaction is seriously complex. Brands and retailers have to manage international pricing, payments, FX, duties, taxes, shipping and returns, not to mention localizing websites to potential international customers.

For many sellers, this is not what they signed up for. As a result, while the average US retailer has 34% international traffic, this generates just 13% of sales — that’s some serious lost revenues.

Despite this imbalance persisting, significant companies have been built trying to address this gap (although anyone who has tried using existing solutions, as a retailer or consumer, will understand there must be a better way).

Flow has built what we believe will become a critical piece of infrastructure in the e-commerce tapestry. Delivered through a seamless, modular SaaS tool, Flow enables brands and retailers to serve customers globally as though they’re in the next door town.

Just as Magento, then Shopify, have refined and provided control for both buyers and sellers online, so Flow is creating a new standard for cross-border commerce.

Seeing the movie play out at Flow since Seed has offered us the insight to enable us to build deep conviction that now is the ideal time to invest through Latitude.

It takes a village to raise a child

We deliberately set up Latitude to be a known and trusted co-investor to participate alongside leading Series B funds, many of whom we’ll have worked alongside several times with LocalGlobe. In Flow, we’re thrilled to be partnering with NEA, as well as Bain Capital Ventures which is doubling down having led Flow’s Series A.

We quite deliberately structured Latitude as a separate fund and separate brand to LocalGlobe. We wanted to underline our ambition that through Latitude we are ‘going again’, bringing a team with experience tailored to Series B and beyond, while continuing to leverage the support of the LocalGlobe team that will often have been in the trenches with founders since the earliest days.

As mentioned, we felt that Europe would in time become an important market for Flow. That time is now, as Flow looks to London to build its international presence. Indeed, sitting in London the opportunity may look even more obvious than in the US, with cross-border a part of everyday life for many brands and retailers. Post-Series B, Latitude will be ‘going again’ to support this important bridgehead into international markets.

Flow is the kind of investment we love to make through Latitude — access, insights, and the opportunity to roll up our sleeves and use our builder DNA which is foundational to both LocalGlobe and Latitude.

Now off to work addressing one of the largest opportunities in commerce…