Pipe17, a “connected infrastructure company,” has closed an $8 million funding round led by GLP Capital Partners. The funding will be used to scale go-to market efforts and expand the Pipe17 team, the company said.
“As strategic investors in e-commerce logistics, we are very familiar with the startups operating in this space,” said Alan Yang, CEO of GLP Capital Partners. “We invested in Pipe17 because of the outstanding team, their track record and their unique vision for solving one of the biggest pain points for e-commerce merchants.”
A McKinsey analysis found that e-commerce penetration in the U.S. grew from about 16% in 2019 to nearly 35% by Q1 2020. It has only accelerated since then, with U.S. sales growing 42% to $861 billion, the report said.
For retailers, including those in the direct-to-consumer (D2C) marketplace, the growth has strained existing technology platforms, many of which are siloed, creating additional work and slowing the overall customer experience.
Pipe17’s cloud-based service connects merchant e-commerce businesses with the growing set of e-commerce platforms, marketplaces, fulfillment centers, financial systems and SaaS applications to form end-to-end automated operations.
Los Angeles clothing brand RipNDip is one of the companies that saw its business grow in 2020. RipNDip’s business doubled in 2020.
“Pipe17 is the backbone of our e-commerce operations,” said Matt Pierce, e-commerce manager at RipNDip. “It makes it easier for us to expand into new channels and fulfill more error-free orders on time. At our recent Black Friday sales event, we received 4,500 e-commerce orders within a couple of hours, in addition to our wholesale and retail orders. In the past, this would have been like a storm hitting us, with limited visibility into the state of our orders and inventory.”
The use of Pipe17’s technology ensured RipNDip was able to fulfill the orders without disruption.
“This unprecedented growth in e-commerce coupled with the pandemic means that merchants small and large are left with increasing operational challenge,” said Mo Afshar, CEO of Pipe17, “With online spending now making up more than 20% of retail spending and more than 1.3 million e-commerce businesses in the U.S., merchants know they need to become more effective and more efficient to get their share of the demand.”
The demand for platforms that allow brands to more seamlessly connect with marketplaces and fulfillment centers is growing, especially for smaller brands without large technology budgets. Another commerce platform, Fabric, announced the closing of a $43 million Series A funding round last week led by Norwest Venture Partners with participation from Redpoint Ventures and Sierra Ventures. The funding round comes just over three months after Fabric closed a $9.5 million seed round at the end of October.
Afshar sees continued growth in the D2C segment as retailers look for technologies that can connect and automate processes across their various platforms, including financial and enterprise resource planning systems.
“Solutions shouldn’t be this complicated. Most of the merchants we speak with don’t have IT staff and are frustrated with their technology service providers.” he added. “Our no-code approach opens up new possibilities for growing their businesses.”