E-Commerce Assistant Shopify Raises $7 Million in First Round
Shopify, which is powering online storefronts that sell merchandise ranging from stuffed Angry Birds to the latest in protective cases for the iPad, is announcing today that it has raised $7 million in venture capital.
Investors include Bessemer Venture Partners, FirstMark Capital and Felicis Ventures.
Shopify has more than 10,000 stores actively selling products on its platform, which provides features such as custom themes to create a storefront, an iPhone app that helps track orders and easy integration with PayPal or credit cards. Competitors in the space include BigCommerce and Yahoo Merchant Solutions.
Tobias Lutke, Shopify’s CEO and co-founder, said the funding will help the company expand the team from 30 employees and add mobile capabilities to its products. Lutke says mobile phones are playing a huge role in this year’s holiday shopping season, and that they can do a lot more “cool stuff” going forward.
The Ottawa-based company was founded five years ago originally as an online storefront selling snowboards and other winter gear. Lutke said that’s when he realized how difficult it was to start an online store. Shopify has now shut down the storefront to focus on reselling the software it has built for itself. He hasn’t raised any money before because the company has been profitable to date.
Shopify is now processing more than $100 million in revenues, and beyond Angry Birds developer Rovio and DodoCase, it counts General Electric, Tesla Motors, Amnesty International and the Foo Fighters as customers. Lutke: “People are becoming extremely savvy about selling online. The time it takes to get up and running is always decreasing. It’s an amaizing thing.”
Aydin Senkut, founder and managing director of Felicis Ventures, said: “We have conviction that e-commerce is a key area, and some areas of e-commerce have not seen a lot of innovation…and I was blown away at how beautiful and practical Shopify is. They’ve been bootstrapping and have had a lot of traction. I was very impressed with the company.”