The push by Boston e-commerce tech startup Privy to become a marketing Swiss army knife for online merchants has fueled a new $4.25 million funding round for the company. The money will be used to double its headcount and help it move into more spacious digs from its current scrappy office quarters.
Founder and CEO Ben Jabbawy said the funding round will help the company ramp up as more merchants sign onto its marketing platform and it seeks to develop more online tools for sellers. Privy’s tools let merchants capture e-mail addresses from fleeting online shoppers, for example, and shoot reminder e-mails to them when they abandon items in an online store’s shopping cart.
Privy’s revenues have doubled in each of the past three years, and the staff this year grew from 10 people to 30, Jabbawy said. (He didn’t share specific numbers but said annual revenue is in the mid-single-digit millions.) He boasted that the company has 100,000 merchants on its platform, and that Privy’s tools drive a combined $100 million a month in additional sales.
“For us, what we really think about is what are the tools that we can democratize for these small upstart merchants that we know work,” Jabbawy said.
The $4.25 million Series A is led by the Cambridge, MA, firm Accomplice, whose partner—and former HubSpot product chief—Sam Clemens is joining Privy’s board as part of the funding round. Other investors include New York’s Tuhaye Venture Partners and previous angel investors, Jabbawy said. The company also recently hired a head of partnerships from cross-town e-commerce tech company Klaviyo, which last year raised $7 million in a round led by Astral Capital.
Privy, founded in 2010 with $330,000 in seed capital, raised $1.7 million in 2013 and $2.2 million in 2017, Jabbawy said.
Jabbawy expects Privy to double in employees over the next year, to 60, as it moves out of its packed 6th-floor loft on Kingston Street to space in the nearby Leather District that will provide a bit more elbow room.
Merchants launching an online store today usually head to a platform like Shopify or Magento to host brands’ products. (Magento was bought by Adobe in May for $1.68 billion.) Online sellers have a host of options for developers to go to for marketing tools. Privy is aiming to be a one-stop shop, offering merchants a single platform to replace a handful of services from different developers.
The growth of these e-commerce tech companies points to a race to be that one e-commerce marketing “system of record,” said Max Faingezicht, chief technology officer at digital marketing firm ThriveHive.
“You’re going to continue to see the consolidation,” Faingezicht said. “The idea that all things should be under one roof makes sense. There is a lot of value having all these things together. The data can help you make better, smarter decisions.”
Privy offers a free plan to get merchants in the door, and then builds on premium services for fees. The company offers free live support to all its customers, paying or not, Jabbawy said.
“We find it creates trust,” Jabbawy said.
Privy didn’t initially start down the e-commerce path. The company’s original target was managing promotions and marketing for brick-and-mortar businesses—think Groupon and other related approaches. In 2012, the company took part in the 500 Startups accelerator in Mountain View, CA, and in the intervening years pivoted to e-commerce after accepting that the time was not right for signing up restaurants and small businesses.
Jabbawy predicts Privy could make a return to Main Street marketing and promotions—though it’s far from a near-term goal—especially as sellers turn to pop-up shops and other promotional avenues heavily linked to the enterprise’s online reach.
The future of e-commerce is global, Jabbawy said. It’s also mobile, and it’s across many channels: SMS, e-mail, Facebook Messenger, and Instagram. He said future marketing tools will aim promotions and messaging at the shopper’s preferred channel, and his expanding outfit has its sights on more and more types of online marketing tools.
“It’s not to say that Privy wants to take over all of that,” Jabbawy said, “but a lot of the concepts we’ve built out, we can expand to support more use cases under a single roof.”