Ecwid, a Shopify-style ecommerce platform, has raised a $ 42 million round after seeing “dramatic growth” during the COVID-19 crisis.
San Diego, California-based Ecwid is a software-as-a-service platform that lets anyone set up their own online stores and includes tools for creating websites, managing orders and inventory, and accepting payments. It also offers a white label version, allowing third-party agencies, site builders, hosts, and point-of-sale platforms to bundle ecommerce stores into their respective services without having to build the technology themselves.
Ecwid said the additional $ 42 million will “fuel aggressive growth,” including a hiring spree it expects will double its headcount. The company added that it plans to buy out some of its earlier-stage investors, including Runa Capital and ITech Capital. Ecwid’s latest investment was led by Morgan Stanley Expansion Capital and PeakSpan Capital.
Ecwid had raised a modest $ 6.5 million in the 11 years since its founding, and this latest round points to surging in interest due to the pandemic. Social distancing measures have led to a sizeable uptick in online purchases, so businesses that previously relied on brick-and-mortar sales have had to adapt. Ecwid said its customer sign-ups have tripled, while transaction volume among its hundreds of thousands of existing customers grew by more than 50% between March and April.
Above: Ecwid order notification
Social shopping
The announcement comes just a few days after Facebook launched a new service called Facebook Shops, making it easier for businesses to set up online stores on Facebook and Instagram. Ecwid also offers tools that let sellers transact business through social networks, including Facebook and Instagram. But founder and CEO Ruslan Fazlyev is adamant that his platform is sufficiently differentiated from Facebook’s.
“One of the many advantages of using Ecwid is that you can set up your shop and sell on the web, on Facebook, Google Shopping, Amazon, and many other channels,” Fazlyev told VentureBeat. “Customers can also create a branded app and list their business in the App Store and Google Play store. For example, a pizza shop can have their loyal customers order directly through a branded mobile app or a furniture company that wants to create an in-app catalog experience for iPad — we do it all.”
Ecwid’s obvious competitor is, of course, Shopify. But Fazlyev believes his company’s product is distinct enough to appeal to the millions more businesses now looking to incorporate ecommerce. Among its selling points, Ecwid offers a basic free service and the white label version.
The past few weeks have seen a marked increase in investments across the ecommerce sphere, with Square launching a new PayPal-like online checkout system and New York-based Slice locking down $ 43 million in fresh funding to help local pizzerias sell online.
A number of brick-and-mortar retailers — including JC Penney — are facing bankruptcy, while Walmart reported record ecommerce sales this week. Data suggests that online retail sales have grown by 50% in the U.S. alone during the pandemic, and Ecwid is now well-positioned to benefit from these trends.
“The new wave of funding gives us the resources and flexibility to accelerate the evolution of an ecommerce platform and to further expand internationally,” Fazylev said. “We are playing an important role in enabling small businesses to survive, thrive, and grow in this new COVID-19 world.”