The global market for mobile commerce is expected to balloon to $6.1T by 2027 from $1.9T in 2020. The pandemic has fundamentally shifted the way consumers look at e-commerce as lockdowns limited in-person activity. Businesses have had to adapt their digital strategies to address this growing interest as mobile becomes a significant driver of revenue growth. Shopify is the leading all-in-one platform for brands, small businesses, and entrepreneurs alike to establish digital storefronts. Tapcart is the mobile commerce platform that enables Shopify merchants to launch their own full-featured mobile apps – a much-needed complement in today’s digital landscape. While many e-commerce merchants have become overly reliant on paid digital, Tapcart’s easy-to-use drag and drop solution offers cost-efficient push notifications to merchants with plans to launch other value-add tools like marketing automation, personalization, and developer kits. During the uncertainty of the pandemic, the Santa Monica-based company was able to grow revenue 3x, handling mobile sale transactions exceeding $1.3B in gross merchandise value (GMV) for brands like Pier One Imports and FIGS.
LA TechWatch caught up with CEO and Founder Eric Netsch to learn more about the inspiration for the business, the company’s strategic plans, latest round of funding, which brings the total funding raised to $65.1M, and much, much more.
Who were your investors and how much did you raise?
Tapcart raised a $50M Series B led by Left Lane Capital with participation from Shopify, SignalFire, Greycroft, Act One Ventures, and Amplify.LA.
Tell us about your product or service.
Tapcart is the ultimate mobile commerce platform that enables Shopify-powered brands to launch mobile apps. This allows brands to create and grow an owned marketing channel of push notification subscribers. The platform is growing – marketing automation, advanced analytics, and developer tools are coming soon.
What inspired the start of Tapcart?
Tapcart was inspired by an idea – that every eCommerce brand should have its own end-to-end sales and marketing channel on mobile. Shopify is an entrepreneurship company; it provides a platform and tools that empower entrepreneurship. We love this mission and provide the conduit for entrepreneurs to realize it on mobile.
Sina [Mobasser, cofounder] and I had plenty of experience building custom mobile apps. Shopify empowered us to build a platform where we could work with millions of brands instead of a select few each year. Our solution lowers the barrier to entry – you no longer need a dedicated engineering team and a ton of resources and time to build and maintain a mobile app.
How is it different?
Tapcart separates itself from other mobile app providers through its product and deep integration with Shopify. The platform enables brands to design and launch an on-brand mobile app, send rich push notifications to shoppers, and update the app regularly. Many of the largest brands on Shopify trust Tapcart with their mobile app. Traditionally, it would take one year or more to launch a custom mobile app. With Tapcart, you can launch one in weeks.
What market are you targeting and how big is it?
There are 1.7 million eCommerce merchants that use Shopify, and that number continues to grow. We empower these merchants to launch a mobile app and will integrate with other eCommerce platforms in the future.
What’s your business model?
We’re a SaaS company and charge a flat monthly fee for access to the platform. We’ve designed plans to fit the needs of SMB, mid-market, and enterprise merchants. Strong product performance and innovation drive high retention and revenue growth.
How has COVID-19 impacted the business?
Covid has generated a lot of interest in eCommerce and mobile commerce, especially from retail-focused brands that have traditionally relied on brick-and-mortar distribution. Despite the uncertainty and ups-and-downs Covid created for many businesses, it has undoubtedly accelerated the growth of eCommerce.
Mobile commerce spending grew 55% YoY, exceeding $53 billion globally during the online holiday shopping season alone. Over that span, Tapcart merchants received mobile app orders at a rate of more than once per second. Tapcart’s recurring revenue increased 3x in 2020.
What was the funding process like?
The funding process is always an adventure and a challenge. We just closed our fifth fundraising round, so we have an idea of what to expect! We’re grateful to have an incredible team with a great business and story to tell. Still, Covid presented a new challenge in fundraising since the majority of the calls and meetings were done over video.
What are the biggest challenges that you faced while raising capital?
The macro trends in mobile are undeniable. No one debates the huge upside in solving the mobile commerce problem, but there are many potential ways to attack it. Tapcart’s thesis is to solve mobile commerce through a connected and personalized mobile app experience. We’re taking a platform approach, bundling push notifications with insights, and other tools. The success this has driven for thousands of customers resonates more and more with each raise. Investors see solving the mobile commerce disparity as an important position to take, and proving Tapcart is the right solution has been getting easier and easier.
What factors about your business led your investors to write the check?
It all starts with the vision to build something big: the ultimate mobile commerce platform for brands. And it’s driven by a strong team, sustainable growth, amazing customers and product-market fit.
We aren’t just looking to build a billion-dollar unicorn. We see Tapcart as a platform that can scale to hundreds of thousands of merchants worldwide and become a decacorn in the process. Investors have bought into this vision as well, and it has also led Shopify to join the family as an investor. We want to win big. Something we have in common with all of our investors.
What are the milestones you plan to achieve in the next six months?
We will be expanding our go-to-market strategy and launching innovative new products, like marketing automation, personalization, and developer SDKs.
In addition, we plan to double our headcount and will be hiring for 50 new positions across engineering, operations, customer success, product, and sales.
What advice can you offer companies in Los Angeles that do not have a fresh injection of capital in the bank?
Focus on customer experience. Making a customer successful or happy usually doesn’t cost a lot. Nailing the product-market fit and retention model for your startup before scaling is super important. Everyone knows it costs more to find a new customer than to retain an existing one, this is even further emphasized in B2B software startups.
As early as possible, identify the metrics, numbers, and levers that will affect your revenue and growth. Also, it’s equally as important to build an amazing team and employee experience. These are the things that get investors excited to invest.
Focus on customer experience. Making a customer successful or happy usually doesn’t cost a lot. Nailing the product-market fit and retention model for your startup before scaling is super important. Everyone knows it costs more to find a new customer than to retain an existing one, this is even further emphasized in B2B software startups.
As early as possible, identify the metrics, numbers, and levers that will affect your revenue and growth. Also, it’s equally as important to build an amazing team and employee experience. These are the things that get investors excited to invest.
Where do you see the company going now over the near term?
We plan to expand our go-to-market strategy, accelerate team growth, and launch innovative new products into the market.
What’s your favorite outdoor activity in LA?
I am lucky enough to live in an area with great weather year-round. I try to make the most of that by hiking and spending time at LA’s beautiful beaches.
