INSUBCONTINENT EXCLUSIVE:
Global retail e-commerce is expected to be a $25 trillion business this year, and today one of the companies that has built a set of tools
to help larger enterprises sell to consumers online has raised a large growth round to meet that demand
Commercetools, a German startup that provides a set of APIs that power e-commerce sales and related functions for large businesses, has
source is around $300 million.The funding comes at the same time that commercetools is getting spun out by REWE, a German retail and
tourist services giant that acquired the startup in 2015 for an undisclosed amount.The route the company took after that is a not totally
uncommon one for tech startups acquired by non-tech companies: commercetools had been acquired by REWE as part of a strategy to take some of
its own e-commerce tech in-house, but commercetools had always continued to work with outside clients and has been growing at about 110%
annually, CEO and co-founder Dirk Hoerig said in an interview.Current companies include Audi, Bang - Olufsen, Carhartt, Yamaha and some very
big names in retail products and services (including major telco/media brands in the USA that you will definitely know)
Ultimately, the decision was taken to bring in outside funding and spin out the businesses as an independent startup once again to
REWE will remain a significant shareholder with this deal.Hoerig said that commercetools had raised only around $30 million in outside
funding when it was a startup ahead of getting acquired.Although e-commerce has grown over the last couple of years with slightly less
individual retail brands looking for ways of connecting more directly with customers outside of the third-party marketplaces (like Amazon)
that have come to dominate how people are spending money online.That is giving a boost to those providing essentially non-tech businesses
medium and smaller customers, and it has ballooned to some 800,000 customers
Commercetools, in contrast, focuses more on companies that typically generate revenues in excess of $100 million annually, Hoerig
Hoerig noted that companies like SAP, Oracle and IBM are typical competitors and are more often already the incumbent provider to large
Then, there are others like Microsoft, in hot competition with Amazon for cloud customers, also expanding their commerce services for
marketplaces, social commerce services (for example, powering selling through Instagram) and augmented reality
It currently integrates with Adobe, Frontastic, Bloomreach and Magnolia.Commercetools plans to use the funding to continue expanding its
businesses to sell to other businesses
This is an area that companies like Alibaba are very strong in (and Amazon has been also growing its business), and the idea is to provide
tools to let companies sell on their own sites either as a complement to, or to replace, third-party marketplaces.Another area where it will
continue to figure where it can play better is in the development of better online-to-offline technology.Richard Wells and Matt Gatto of
