Today BigCommerce announced that Goldman Sachs has led a $64 million growth equity investment, with backing from current investors General Catalyst, GGV Capital, and Tenaya Capital.
The implications for our customers, partners, and industry will be profound, and our entire team is thrilled to partner with Goldman Sachs, a world-class firm and global financial services leader.
As I near my third anniversary since joining the company, I wanted to share some perspectives on where we’re headed and how this major investment accelerates our path to get there.
BigCommerce’s founders, Eddie Machaalani and Mitch Harper, launched the company in 2009 after meeting in an online chat room while living in Sydney.
They shared a mutual passion for small businesses and believed that selling online shouldn’t require $100,000+ in up-front development work.
The software-as-a-service (SaaS) ecommerce platform they built achieved near instant, widespread success among a global base of small and medium-sized businesses.
In comparison to the legacy model of downloaded shopping cart software, Eddie and Mitch gave merchants a complete solution delivered through the cloud.
Even in 2009, the platform offered comprehensive store set-up functionality, customizable design themes, hosting, catalog management, order management, and an ecosystem of related solutions for payments, shipping, marketing, etc. Industry-leading site performance, security, and bug fixing were part of the package. All this was sold for as little as $30/month – no engineering required.
We’ve grown rapidly since those early days.
Today, BigCommerce ranks as the world’s #2 SaaS platform after Shopify, which launched 6 years before we did.
Building for Scale and Enterprise
In 2015, we realized our platform was increasingly being used by global brands selling in the millions online, and that these customers requested a different set of capabilities, expected a different level of service, and required flexibility in how they operate their businesses.
That summer I joined as CEO, an opportunity I was thrilled to pursue given the immense market opportunity and my career passion for ecommerce. (I’ve worked in ecommerce since the late 1990s, including at Escalate, one of the first-ever SaaS platforms.)
Before joining the company, I recognized there was no leading SaaS platform focused specifically on mid-market sites selling $1 million to $50 million online.
Shopify was serving small brands, while Demandware (now Salesforce Commerce Cloud) was primarily focused on large retailers selling north of $50 million per year. To effectively serve the mid-market, we started investing heavily in our Enterprise product and service to compete head-to-head with the on-premise incumbents like Magento, Oracle, and IBM.
BigCommerce is now the SaaS leader serving enterprise-level, mid-market sites.
Internet Retailer recently rated us the fastest-growing platform serving the top 1000 B2C stores in North America. In terms of total number of IR1000 sites served in that report, we’re the fifth-largest after Magento, Oracle, Salesforce, and IBM. Notably, of the top-10 platforms, all of the on-premise ones —including Magento— are declining in market share.
Share is shifting definitively to SaaS, led by the three market leaders: Salesforce (large enterprise), BigCommerce (mid-market), and Shopify (SMB). By the way, we’re also a leading platform for B2B sites, ranking #2 SaaS on the Internet Retailer B2B 300 list.
How do we reconcile serving both large enterprises and small to medium sites?
Our mission as a company is to build the world’s best ecommerce platform for growing and established businesses.
Because of our multi-tenant SaaS architecture, we can power success at every stage of a business’s growth. Our dozens of Fortune 1000 customers use the same technology and platform as our SMBs. That means that SMBs who start with BigCommerce make a great choice, since they will not outgrow us.
Even our Enterprise customers don’t outgrow us, as evidenced by a monthly retention rate well above 99.5%.
Importantly, we pour all of our company resources into the key capabilities, performance, and scalability of this core platform. Unlike Shopify, we aren’t distracted by ancillary businesses like proprietary payments, shipping, POS, and lending.
BigCommerce partners, and integrates seamlessly, with the market leaders in each of those categories, thereby delivering better solutions – and freedom of choice – for our customers while keeping our company 100% focused on our core platform.
Investing in Our Customers’ Success
The most common funding-related question founders / CEOs receive after announcing new capital is, “How will you use the funds?” Platform investment will constitute the number one use of proceeds from our growth capital.
Particular investment will go toward platform openness, including the APIs and SDKs that let our merchants and their design/solution partners customize and integrate on top of our platform.
Historically, Magento’s greatest advantage against SaaS competitors was their openness and customizability. Those days are over.
We now deliver better openness and customizability than any other SaaS platform in the world, and you no longer need to own and manage software in order to have flexibility. If we can deliver the functionality and flexibility that 90%+ of the market needs, then much of the market will migrate from on-premise to SaaS for years to come.
90% of the capabilities at 20% of the total cost of ownership, not to mention far better performance and security – that’s the proposition we make to the enterprise market.
The “90% capabilities” part gets better as every month passes, since we keep releasing new features and performance upgrades to our merchants.
With the growth capital, we will further invest in strategic priorities including:
- Platform APIs and SDKs.
- Industry-best speed.
- Enhanced storefront design and visual merchandising.
Headless commerce (integration with leading content management applications).
- Enhanced point-of-sale integration capabilities.
- International and cross-border tools to help merchants better sell worldwide.
- Capabilities for complex businesses (multiple stores, warehouses, currencies, etc.).
- Omnichannel integrations with leading marketplaces, social networks, content and advertising platforms.
In addition to platform investment, international expansion will be a second major area of investment.
We already serve merchants in 150+ countries, and merchants outside of the United States (where we’re headquartered) are almost 25% of our customer base.
Since inception, we’ve had a strong technology and business presence in Australia. With our growth round, we will now expand further in Europe, where we already serve many thousands of customers. This means opening a regional headquarters office and hiring European sales, marketing, partner, and service personnel.
We plan to compete across Europe in the years to come, delivering the best product and service available on the continent.
Having once led PayPal Europe (2005-2009) and overseen all of HomeAway’s global sites and offices (across Europe, South America, ANZ, and Asia), I’m personally very excited about this. Meanwhile, we’re already competing in China in conjunction with a valued partner and plan for further Asian expansion in the future.
Long-term Financial Strength
A final, major, use of growth capital is simply “balance sheet strength.” To be clear, we need no additional capital to execute on our vision.
Merchants and partners can have confidence that we’re the best-capitalized private ecommerce platform in the world.
Over time, we’d love to follow in the footsteps of Demandware, which coincidentally was also backed by our Series A investors at General Catalyst and had a very successful run as an independent public company prior to its acquisition.
To Our Merchants and Partners
To our merchants and partners, what matters most is that we’re investing for the long term in the growth of our platform and its service to you.
Your businesses, and your success, are what motivate us.
We plan to make you more successful on BigCommerce than you could be on any other platform in the world. Thank you for the trust placed in us to date.
You have helped us to get where we are. And now with this growth round, you can count on us to help you achieve your highest online aspirations for years to come.
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