Snapcommerce raises $85MM. The future of mobile shopping.
Since our first product Snaptravel launched 4 years ago, millions have come to use and love our service. Collectively we have helped our customers save over 100,000 hours of shopping time and have delivered over $75 Million in direct savings. 100 Million+ messages have been exchanged with 10 Million+ customers resulting in hotel bookings in 10,0000+ cities across 150+ countries.
This year, we will cross over $1 Billion dollars in total mobile sales.
However, we are still quite early in our journey and we’re still very far away from our broader vision of changing the way people shop on their phones.
While our first consumer product is focused on travel, the Snapcommerce vision has always been around evolving the mobile commerce experience — regardless of what a consumer is looking to buy. This becomes more clear every day as our Snaptravel customers ask us for more — goods, restaurants, tickets and a full range of products and services. Because our company has been built on a unified underlying technology platform, this enables us to easily expand to other verticals.
Shopping on mobile
Over the past few decades, E-commerce’s impact has been enormous: it’s transformed industries, it’s disrupted traditional retail stores, and it’s provided incredible advantages for those who adopt it. But despite the enormous selection and convenience gains from E-commerce, there has been surprisingly little innovation in how we shop, and especially how we shop on our phones. Remarkably, shopping online today isn’t that different from shopping online twenty years ago when Amazon first launched, and arguably, the experience has gotten worse for the majority of price conscious consumers who are trying to find the items they want at the best prices.
If you, as an average price conscious consumer, were trying to find a deal on your favorite headset, you would probably open 8 different shopping comparison and retail sites, click through 4 affiliate links, go through 3 unfamiliar checkout flows, try 6 coupons (most of which won’t work), choose one of your 8 credit cards and link to 3 card-link programs and scan the receipt all to save a total of $7 in cashback.
Not only is this a terrible experience and incredible waste of time, the merchants lose out from the lack of pricing differentiation and the final consumer value is extremely poor. On desktop, there are at least tools such as Ebates (acquired by Rakuten for $1b) and Honey (acquired by Paypal for $4b) that attempt to streamline this convoluted process (or maybe make it worse), but on mobile, this system breaks and customers are left to perform this entire process manually on a tiny screen.
Snapcommerce is a dramatically different way for price conscious consumers to shop on their phones. Instead of price comparing, shopping around, browsing endlessly, trying different coupon codes and finding the right rewards card, we streamline the entire mobile search, purchase and fulfilment process and make finding the right item at the right price as easy as sending a message to a trusted friend.
This aligns with the new wave of Gen-Y and Gen-Z consumers who often don’t own a desktop or laptop computer and spend an overwhelming amount of time using messaging apps on their mobile devices.
You simply message us with something you want to buy. We instantly scour hundreds of sources and merchants to give you the best personalized offer. Checkout is as easy as confirming over text, and we take care of the entire checkout and fulfillment process for you. We help our customers make their dollar stretch and make it extremely easy to get a great deal.
We’ve collapsed the crazy worlds of E-commerce affiliate marketing, distribution, sourcing, recommendation, fulfillment, loyalty programs into a streamlined experience on the phone.
Creating value for the merchants
For a merchant to reach a customer and drive a sale, the marketing and promotions alone can often cost upwards of 35% relative to the cost of the item. A typical consumer brand will spend ~20% on direct marketing channels (google, facebook), ~5% on branding and social, ~5% on affiliate / cashback partnerships (rakuten, dosh…) and ~5% on promotions / coupon codes (internal, groupon, honey…).
With Snapcommerce, merchants can cut out the traditional costs of the marketing and distribution middle-men and directly offer customers better pricing over a private and personal 1:1 messaging channel — while still capturing a portion of the savings themselves. This is further augmented by our technology which can identify customers who are more likely to convert with additional savings and we layer on automated personalized promotions. Matching the right customers with the right savings increases conversion rate and ultimately adds more value for the brand and for the consumer.
Building Trust and Loyalty
Messaging is a very personal channel. We leverage this to build and nurture that direct relationship with our customer. Messaging enables seamless 24/7 support, timely updates and notifications, and a conversation that builds trust and loyalty over time. Over 40% of our purchases in 2020 came from repeat customers. Below you can see the customer journey for our first product — Snaptravel.
After we have built that trust with our customer, this opens up a unique set of opportunities. Because we have a direct line of communication with them, this enables us to deliver highly relevant personalized recommendations directly into their messaging inbox.
Again — merchants benefit as well. Instead of fighting in the same limited ad space and providing generics recommendations to all customers, they can now provide personalized offers to customers they choose through a private 1:1 channel.
The right investors for this journey
Today is an exciting milestone in our journey to transform the future of mobile commerce. We are extremely excited to announce the closing of our growth round of investment — adding $85MM USD and bringing our total amount raised over $100MM USD!
The round was co-led by the Inovia Growth Fund and Lion Capital with participation from Acrew DCF (Diversified Capital Fund), Thayer Ventures and Full In Partners. Existing investors (Telstra Ventures, Bee Partners) as well as some strategic individuals also came on board.
Below are some of the key new people aligned in our growth and success:
- Patrick Pichette — Partner @ Inovia Capital. Former CFO of Google for 7 years. Involved with the creation of the Alphabet structure and engaged in 150 acquisitions. Chairman of the Board of Twitter and Lightspeed POS Inc.
- Dennis Kavelman — Partner @ Inovia Capital. Former CFO and COO at RIM for 15 years. Grew the company to 14,000 employees.
- Ed Forst — Chairman @ Lion Capital. Former CEO of Cushman & Wakefield, and former CEO of Goldman Sachs Asset Management. Lion Capital has invested in iconic consumer brands over the past two decades, including Jimmy Choo, AllSaints, Orangina, & Perrier Jouet.
- Sukhinder Singh Cassidy — Co-founder and Venture Partner @Acrew DCF; Former President @ StubHub (sold for $4bn+); Led APAC and LATAM for Google and co-founder of Yodlee; On the board of Upstart and URBN, previously BOD at TripAdvisor, Ericsson, Stitchfix, J.Crew.
- Theresia Gouw — Co-founder and partner @Acrew DCF. Former managing partner at Accel Partners. Named one of the 40 most influential minds in tech by Time Magazine.
- Chris Hemmeter — Managing Director at Thayer Ventures, Elodie Dupuy — Founder and Managing Director at Full In Partners, Brian Long — CEO @ Attentive Mobile, Naren Shaam — CEO @ Omio.
This new funding will allow us to accelerate our progress in multiple verticals and enable us to triple the size of our team in 2021. We are hiring for various roles across the organization and welcome those who want to shape the future of mobile commerce.
We are just getting started
We are extremely proud about how far we have come. Our Snaptravel division grew profitability through the pandemic — and is now poised for dramatic growth given the pent up demand for travel. We expect the second half of 2021 and the first half of 2022 to be some of the greatest periods of consumer travel spending the industry has ever seen.
However, we are just getting started on the bigger Snapcommerce vision. Less than 50% of all E-commerce transactions happen on mobile despite mobile traffic surpassing desktop traffic 5 years ago. Less than .01% of all mobile transactions are made through Snapcommerce despite us closing in on $1B in total sales.
Our direct and personal chat based experience combined with our robust technology platform and strong consumer <> merchant network are key pillars as we continue to grow the business. Snapcommerce will be the easiest way for consumers to find and purchase the right products from the right merchants at the right price. We are here to fundamentally change the way people shop on their phones.
