$100 million from PayPal and Carlyle – TechCrunch

The e-commerce boom that began with the Covid-19 pandemic shows few signs of slowing down, and today a company called Shopware, which provides a set of open source tools to power online shopping experiences for some 100,000 medium and large brands, announces $100 million in funding to seize this opportunity.

Money is notable not only for its nine-digit size, but also because of its background. This is the first outside funding Shopware has ever raised – it’s been seeded and profitable since its inception in 2000, when e-commerce was just getting started – and it comes in part from a large strategic funder: payments giant PayPal and Carlyle (through its Carlyle Europe Technology Partners fund) are its first two outside investors.

“This funding will help us drive our international growth – enabling Shopware to seize the significant opportunities that are before us,” said Stefan Hamann, co-CEO of Shopware, in a statement. “As a company, we are proud to have been profitable from day one and are excited to work closely with Carlyle and PayPal to strengthen Shopware’s positioning for the long term.”

Shopware does not disclose its valuation but notes that Carlyle and PayPal are becoming minority investors. Sebastian and Stefan Hamann – the brothers who co-founded Shopware in the modest town (population: around 7,000) of Schöppingen in northwestern Germany near the Dutch border – will retain a significant majority stake in Shopware, said the company said in a statement. . They will also remain co-CEOs.

So far, Shopware’s sweet spot has served mid-market businesses and brands that aren’t necessarily digital native businesses, but have had to adapt to digital channels to keep up with the changing times and the how consumers discover and purchase goods and services today. .

In other words, the tools he’s built are there to help businesses get a presence and benchmark themselves against the rest of the online landscape, but they’re designed with the intention of making it easy enough for non-tech businesses. and their partners. use. His client list includes the likes of M&Ms and Haribo (ultimately justifying the use of the term “sweet spot”), the consumer electronics company Philips, Stabilo and many others.

The mid-market segment has in many ways been underserved for years: very large companies typically build solutions in-house or work with systems integrators to create custom e-commerce backends; and small businesses had/have a range of website builders, purpose-built platforms like Shopify, and a plethora of marketplaces to sell online.

But as e-commerce continued to become increasingly mainstream — and for a time during the height of the pandemic essentially became the only game in town — not only was the funnel of potential brands and businesses in need of Help to connect has become much broader, but the companies building tools to serve these customers have also grown in number. Shopware’s competitors now include Shopify Plus, Magento, and others that create a mix of headless and other components that brands and others can mix and match to power online shopping experiences, whether through their own websites, via mobile applications or through third-party platforms such as social media sites or marketplaces.

Indeed, the fact that there are so many touchpoints today highlights the complexity of the market, but also the opportunity. This is partly where PayPal fits into the picture. It’s one of several payment providers that Shopware already works with, so the two had an existing relationship. This investment will potentially mean that Shopware will be a way for PayPal to channel more of its new initiatives as it seeks to grow its own payments business beyond basic transactions. But from what we understand, that won’t stop Shopware from continuing to work with PayPal’s competitors.

“The past few years have accelerated the need for an open source approach that delivers exceptional shopping experiences to customers, and we are poised to further capitalize on this growth opportunity,” Sebastian Hamann said in a statement. “We look forward to working with Carlyle and PayPal – two companies with strong expertise in digital commerce – on the next leg of our journey.”

Shopware’s tools today include a platform where its customers can integrate the many other services that come together in e-commerce experiences (including inventory management, invoicing, etc.), an engine to create progressive web apps to run the front-end of a site, guided shopping tools and a business process automation builder.

The plan will be to use the funding both to continue to expand these tools over those built by Shopware’s competition, but also to tap into booming new opportunities in areas such as B2B, i.e. say the brands that do not sell to consumers but to professional users. This will require its own dedicated investment to grow because, like its B2C counterpart, sites selling to business users have boomed over the past two years, but they have their own particular challenges, integrating complex workflows and managing different omnichannel landscapes than a consumer-focused company might encounter.

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