Düsseldorf Corporations like Metro, Aldi Süd and Toyota have already set up their online shop with Spryker. With the software from the start-up, companies can open up contemporary sales channels – from online shops to fitness equipment that sells subscriptions. “We benefit from the fact that everyone now wants to sell something online,” says co-founder Alexander Graf.
Now the US growth capital firm TCV is investing 100 million euros in Spryker together with existing investors Project A from Berlin and One Peak from London. The round, which is also considerable in size, became known this Thursday. The Berlin start-up of the founders Alexander Graf and Boris Lokschin is to expand internationally more quickly and win customers.
It’s about the moment: Due to the corona pandemic, online sales are now “one of the top 3 priorities for every company,” says One Peak investor David Klein. Companies only change their IT infrastructure every three to five years, says Klein. Whoever wins customers today will secure market share for years.
The move to a new system is often more expensive for companies than an offline move. In addition to the cost of setting up, there are training courses for employees and significant efficiency losses. “No company changes rashly and without tough arguments,” says online retailing expert Mark Steier.
TCV investor Gopi Vaddi estimates that the market for e-commerce software has worldwide sales of currently seven billion dollars. And he anticipates rapid growth, driven by traditional offline retailers who are rethinking their digital strategy in the pandemic.
Many of them are of particular interest to Spryker as potential customers. Because what initially looks like a single market segment is a broad field. The requirements of small online retailers and corporations with department stores for e-commerce software can hardly be compared.
The range is covered by providers such as Shopify and Spryker at opposite ends. While the rapidly growing Shopify from Canada offers a shop kit for everyone, Spryker customers get a platform that can exploit the potential of new technologies.
Local offers, individual prices
E-commerce expert Mark Steier gives examples: “Special offers in individual branches and corresponding online advertising must be made dependent on the local inventory. When it comes to prices, retailers at different locations must be able to react to offers from local competitors. Customers who have looked at shoes online should be informed when strolling through town when the local store has their size in stock. ”Subscription and rental models can only be implemented with special software. In the business customer environment, it is also about volume discounts.
For many Spryker customers, it is no longer just about being present on the Internet, says Alexander Graf. The multiple founders and co-managing directors Graf, 40, and Lokschin, 35, both have degrees in business administration and, as owners of agencies and e-commerce service providers, have found that existing software does not meet the needs of the market.
According to Graf, Spryker is therefore aimed at customers with digital sales in the millions, i.e. medium-sized companies and corporations. Because the implementation is complex, requires specialists and a corresponding software stack, i.e. software components.
Spryker’s competitors are thus offers like SAP Commerce Cloud (formerly Hybris) and Salesforce Commerce (formerly Demandware). Investors see the advantage of Spryker in its agility. The start-up can adjust to completely new business models more quickly.
“The architecture of these competitors does not fit well with what customers are looking for today,” says Gopi Vaddi. “Spryker can better serve the needs of modern companies.” For the company with 250 employees, it is now important to convey this. Otherwise it should be more natural for many customers to fall back on Salesforce and SAP, which they are already working with.
Alexander Graf is aware of this: “If you look at our expenses, we invest significantly more in very good sales personnel than in advertising,” he says.
The company has 150 customers so far. Spryker’s software sales have grown by more than 100 percent in each of the past three years. It has already proven that the company can be profitable. But that doesn’t matter now.
The investors rated the start-up as part of the financing round at around EUR 500 million. “In the next few years we expect many hundreds more customers worldwide from Spryker”, says investor David Klein.
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