Starting an e-commerce business in one of the big marketplaces, say Shopify, can be an easy process, but what the Swell team started to notice was that the model could only take a business so far. ‘now.
Swell works in “headless” commerce, meaning it disconnects the front-end of a website, i.e. the storefront, from the back-end, where all the data resides, to creating a better shopping experience and so that everything on the back end can be updated and maintained without disrupting the front end.
The remote enterprise offers APIs, storefronts, and a dashboard, all tools that can scale with any business. The first version of Swell was a pure API for developers, but it didn’t allow businesses to get started quickly, so companies turned to marketplaces like Shopify, CEO Eric Ingram told TechCrunch.
“The key is to get started quickly, which Shopify is great, but you realize you’re stuck when you try to do more than the basic model,” Ingram said. “We needed to create something as simple as Shopify, but one that lets you grow. Most people can’t afford to build their own back-end, so we also wanted to provide something that people could do without spending millions of dollars.
Swell was an idea Ingram had about a decade ago that grew out of his time at e-commerce company Digital River and then starting a few of his own businesses, including a clothing business. He and his team kicked things off in 2021, raising $3.4 million in a funding round.
Almost a year later, the company is back with a $20 million Series A funding round, led by VMG Catalyst and Headline, with participation from Bonfire Ventures, Willow Growth, Commerce Ventures and Red Antler. Individual investors include watchful CEO Brian Long, Gorgias CEO Romain Lapeyre, Remote First Capital and former Product Hunt CTO Andreas Klinger, Fast.co CEO Domm Holland and Brian Magida of Warby Parker.
The opportunity for additional funding was somewhat unexpected, according to Ingram, but he feels Swell’s focus on small and medium-sized businesses, while building an ecosystem and community, separates it from competitors like Commercetools and Fabric which target large enterprises.
“To solve the problem, it has to be something that everyone can afford rather than just big companies with big budgets,” Ingram added. “Some of the platforms are only good for one thing, but there are hundreds of other models.”
Over the past year, Swell has increased its revenue fivefold and grown its customer base to over 1,000 by the end of 2021 after starting the year with 30 customers. He also created a free community plan, where customers start paying when they start selling, to go with standard and enterprise options.
Ingram plans to use the new funding to grow Swell’s team from 30 to 100 people over the next 12 months and in product development, including building an app ecosystem. Plans include creating a framework for third parties to build the apps and also for customers to own their own data on the back-end and do more with it, which is difficult for companies that rely on markets, he said.
“A key feature will be a configurable database that could adapt to new use cases,” he added. “The market is changing rapidly with integrations and building apps and the community will need 10x more people to level up.”