Upscribe Raises $ 4 Million For Its Ecommerce Subscription Model

Despite the rapid growth of e-commerce, selling products online is not easy. Figuring out how to draw customers into a crowded space and keep them coming back for more has spawned a slew of newcomers who promise online retailers an edge.

Los Angeles-based Upscribe, which comes out of stealth after nearly two years, believes the subscription model is the future of e-commerce. This week, the company secured a $ 4 million funding round led by Uncork Capital.

“The first wave [of ecommerce] was moving from offline to online retail, ”said Founder and CEO Dileepan Siva. “The next wave of e-commerce is for brands that sell things on a recurring basis through subscriptions. This is how we win. “

Before Upscribe, Siva’s experience in consumer goods occurred as the market shifted away from brick and mortar to e-commerce, in which he paid close attention to this transition. . Once brands were up and running online, attracting loyal customers seemed to be of paramount importance for these brands to thrive.

Siva said that Upscribe’s customer base consists of several dozen brands, such as coffee company Four Sigmatic and skin-care brand True Botanicals. But he said the young company has deliberately avoided marketing its business until now to focus on product development.

A screenshot of the Upscribe User Dashboard.

Siva said that unlike competitors such as ReCharge, a Santa Monica-based SaaS unicorn, Upscribe focuses on acquiring and retaining subscribers in addition to creating a subscription management system because, in its opinion, offering a subscription service is the bare minimum.

“It’s like a car should have an engine,” Siva said.

To help customers grow their subscriber base, Upscribe analyzes the data to identify repeat customers who are not subscribers and runs campaigns to subscribe them. A testimonial on the Upscribe website claims that customers see a 50% increase in subscriber numbers once they switch to Upscribe.

Similar companies, such as Venice-based Repeat, have heard of a unique problem with monthly subscriptions for consumer goods – a fixed monthly replenishment is likely to result in too much or too little product for the customer. Upscribe solves the problem by allowing customers to personalize their subscriptions.

While much of the work of Upscribe’s customer base relates to packaged consumer products, Siva said he anticipates the model will emerge in fashion, where companies like Stitch Fix and thredUP have already used it. fashion. Siva believes that the “next wave” of e-commerce brands will take a “subscription-first” approach because it ensures businesses build a relationship with returning customers.

“[It’s] “Buy my coffee on a recurring basis” versus “I’ll just run an ad and hope you buy me once and hope you come back and buy again,” he said. “This game is over. “