There’s a whole cottage industry of startups eager to help retailers crack the e-commerce code.
Two of those startups — Seattle-based Ideoclick and Replenium — just landed a total of $15.5 million in funding to make retailers better at selling online, both through Amazon and their own platforms.
Former Amazon executives Tom Furphy and Justin Leigh launched Ideoclick in 2009 to help internet retailers sell goods and manage their presence on Amazon. Over the past decade, the platform grew into something more ambitious as e-commerce sales continue to increase.
One of Ideoclick’s early products was inspired by Amazon’s “Subscribe & Save” program, which offers a discount when shoppers opt for recurring orders. In 2013, the company decided to launch Replenium as a standalone company to bring this style of subscription service to brands everywhere.
Six years later, the companies still share an office. Leigh is CEO of Ideoclick and Furphy heads up Replenium.
The Series A rounds for both startups were led by GLP, with participation from existing investors.
Singapore-based GLP’s investment in the two companies comes after a massive cash windfall following the sale of $18.7 billion worth of logistics assets to Blackstone in June. Amazon was the largest tenant of GLP’s massive warehouse holdings prior to the sale, the Wall Street Journal reported.
Ideoclick and Replenium are members of a growing cohort of startups that exist to make sellers more adept at e-commerce sales on Amazon and other major platforms. Other Seattle-based startups in this area include InsightLeap, Stackline, Downstream, Gradient, and SoundCommerce — all of which were founded by former Amazon employees.
“We are the complete Amazon operating system for brands,” Leigh said. “When a brand goes to market on Amazon, it’s much different than every other retailer. … It’s a technology platform, and everything you do on Amazon needs to be coordinated and done accurately every day.”
And it’s not just startups getting in on the action. “Over the years, we’ve seen a lot of the bigger agencies and consultancies starting to enter the space as well because they need to have Amazon solutions for their clients and customers,” said Leigh, who formerly worked as a project manager of consumables at Amazon. “That’s where all the growth is. That’s where all the ad dollars are going.”
There’s plenty of business available for ex-Amazon employees who want to set up boutique shops that help retailers sell on Amazon, said Leigh. The challenge — and Ideoclick’s mission — is to scale that kind of white-glove service into a technology platform that can help retailers with millions of unique products.
Ideoclick, which raised $7 million, gathers and analyzes all the data that is relevant to Amazon sellers into one place. It then recommends actions they can take to improve their business — everything from developing new strategies to the nitty-gritty of how brands write product descriptions and package goods.
Leigh said the company now manages around $2 billion of Amazon retail sales and is one of the top five largest agencies in terms of advertising spending on Amazon.
Replenium plans to use the $8.5 million it raised on product development, marketing, customer acquisition and expanding its partner network. Its customers include Target, Burt’s Bees and Renew Life.
“Retailers like [subscriptions] because they drive higher, more predictable revenues with larger baskets and higher efficiency,” said Furphy. “Customers don’t like to shop in stores for these types of products. … Nobody is excited to shop at the grocery store for laundry detergent. Nobody is in love with lugging home the 16-pack of toilet paper.”
While Furphy admits that Amazon will continue to “set the standard for e-commerce,” Replenium gives other brands a chance to offer the same kinds of services without having to build it. Replenium’s CTO Umair Bashir worked on “Subscribe & Save” at Amazon, and Furphy was vice president of consumables and AmazonFresh.
Replenium has 20 employees and Ideoclick has 100; both companies are headquartered in Seattle.
John Zagula, the founder and managing director of Seattle-based Ignition Capital, sits on the boards of both Replenium and Ideoclick.