15.5 C
Moscow
Sunday, April 11, 2021

Jungle Scout raises $110M, acquires Downstream Impact to help 3rd parties sell on marketplaces like Amazon – TechCrunch

Must read

A ‘more honest’ stock market – TechCrunch

Hello friends, and welcome back to Week in Review! Last week, I talked about Clubhouse’s slowing user growth. Well, this week news broke that they...

FAA Wants Airlines To Inspect Boeing 777s For Rivet Issues

The US Federal Aviation Administration (FAA) has recently proposed an airworthiness directive (AD) regarding Boeing’s popular 777 family. Specifically, the government body wants the...

Parents, Stop Talking About the ‘Lost Year’

“You had a sort of a sense of resilience and ‘grit,’ even prepandemic that I think served them well,” she said. “I do see...

TSA Now Allows Full-Size Sunscreen To Travel In Carry-On Bags

Last week, the Transportation Security Administration (TSA) now allows passengers to bring full-size sunscreen bottles in carry-on bags. On Wednesday, April 7, the TSA...

There has been a rapid proliferation of roll-up companies armed with wallets full of money to consolidate promising smaller merchants that sell on Amazon and other marketplaces, the idea being to create economies of scale to help them sell more effectively and grow. Today, a company that is somewhat doing the opposite — building tools to help Amazon sellers work better on their own — is announcing a big round of funding to keep growing its business.

Jungle Scout, an Austin-based company that builds tools covering services like search and market analytics, inventory management, and sales intelligence for companies selling on Amazon, has picked up $110 million, an equity round that it is using in part to make an acquisition — Downstream Impact, a specialist in Amazon advertising founded by two ex-Amazon execs who did early work on Amazon’s in-house advertising efforts — and in part to continue growing its business.

You may not know the name but Jungle Scout it is quietly huge. It says that its tools impact some $8 billion in Amazon revenue with around 500,000 brands and entrepreneurs already using it. Its data engine ingests search, purchasing, and other information for some 500 million Amazon products, which it then turns into data to help customers sell on Amazon better.

Jungle Scout began life in 2015 focusing primarily on providing optimizing search tools for sellers solely on Amazon — if you didn’t guess that already by the “Jungle” and “Scout” in its name. Tools for improving business on Amazon still make up the bulk of its business, with its functionality covering not just Amazon.com but nine other regional Amazons. But now, the startup is slowly starting to expand its services beyond that. That could include Google Shopping, Facebook’s many social platforms, and more — whichever marketplace platforms consumers happen to be using.

“We are starting with Walmart.com, which will be live in near future,” CEO Greg Mercer said in an interview, “and the vision is to expand beyond that. We’re bullish on the future of Amazon, but if we think beyond that, my prediction would be that besides those platforms where people primarily go to purchase things, there are places where consumers spend their time — such as Google or social channels like Instagram — that could be other areas where we could provide tools to sell through.”

The startup is also building out more business on the ground in China, he said, as this represents one of the fastest growing source countries not just for goods, but merchants, too.

Summit Partners, the venture capital and private equity firm, is the primary investor in this funding round, with Mercer himself also contributing. It’s not clear how much Jungle Scout has raised to date: PitchBook notes that Summit had backed it previously, in 2017, at an undisclosed sum and valuation. We’ve asked for more detail on this and will update as and when we look more. Valuation is also not being disclosed.

You might notice that in the first paragraph of this story I mentioned that Jungle Scout is “somewhat” taking a different approach to the roll-up companies, companies like Thrasio, SellerX, Branded, HeydayHeroesPerch, Berlin Brands Group, and doubtless others that are raising giant sums of money to source, and then partner with or buy up, third party sellers.

Jungle Scout does indeed provide a valuable service to Amazon retailers who are leveraging the giant’s FBA platform to manage a range of services like inventory, shipping and marketing (in the form of appearing on Amazon to sell things), and who want to remain independent and not be “rolled up.”

However, that’s not actually the full story. Mercer tells me that his company also provides its technology as a white label service to most of the big roll-up players — which of these, he did not note — and so you might also say that even if third-party merchants are not working directly with Jungle Scout, they might well end up doing so indirectly.

The opportunity for building out more tools to address the Amazon economy is a massive one. As we’ve pointed out before, it is estimated that the number of third-party sellers on Amazon currently stands around 5 million, a number that appears to be growing exponentially at the moment, with more than 1 million sellers joining the platform last year. That includes not just smaller retailers who are looking to extend their consumer touch-points, but also increasingly a number of big brands that are now looking at how they can leverage Amazon better to sell directly to consumers on the platform, rather than via third-party merchants.

Within that, advertising remains a huge and growing part of the equation.

If you are an Amazon user, you’ll notice that ads search pages have been growing in number over the years (these are the sponsored results that come up at the top of searches you might make for a product), and so you will be unsurprised to know that advertising, as a result, is really growing fast for Amazon itself.

Ads alone accounted for $21.5 billion in annual revenue for Amazon in 2020, up 66% year-over-year.

Connor Folley, Downstream’s CEO who co-founded the company with another ex-Amazonian, Salim Hamed (who is Downstream’s CTO), told me that ads “within the walls of Amazon itself” still make up the majority of that figure, although it will continue to invest in areas like its DSP to expand beyond its own ecosystem. That makes it somewhat of a dark horse in the world of advertising, which up to now has been more concerned with the rise of Facebook among “new” players.

“The explosive growth of Amazon advertising over the last five years has surpassed many people’s expectations,” he said. “It might be a $50 billion dollar platform by 2023 — and much bigger than Facebook.”

While there are a lot of companies out there building tools and alternatives for sellers to get a better grip to sell on Amazon, the attraction here has been in part the size of Jungle Scout and its prescience in building this market in the first place.

“Jungle Scout was one of the first companies to identify the opportunity to provide SaaS-based tools to help businesses and brands expand their ecommerce footprints on Amazon and beyond, and the company has built on this leadership position over the last several years,” said Neil Roseman, Technologist-in-Residence at Summit Partners and Jungle Scout Board Director, in a statement.

It’s a strong vote of confidence when you consider that Roseman himself is also an ex-Amazonian, having been its VP of technology between 1998 and 2007 working on marketplace technology among other things. “We believe Jungle Scout’s technology is robust and highly scalable, designed to help a company to grow as the Amazon third-party selling ecosystem has expanded. We believe the addition of Downstream Impact will add to this product and engineering strength, and we are thrilled to be a part of the company’s growth journey.”



Source link

More articles

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Latest article

A ‘more honest’ stock market – TechCrunch

Hello friends, and welcome back to Week in Review! Last week, I talked about Clubhouse’s slowing user growth. Well, this week news broke that they...

FAA Wants Airlines To Inspect Boeing 777s For Rivet Issues

The US Federal Aviation Administration (FAA) has recently proposed an airworthiness directive (AD) regarding Boeing’s popular 777 family. Specifically, the government body wants the...

Parents, Stop Talking About the ‘Lost Year’

“You had a sort of a sense of resilience and ‘grit,’ even prepandemic that I think served them well,” she said. “I do see...

TSA Now Allows Full-Size Sunscreen To Travel In Carry-On Bags

Last week, the Transportation Security Administration (TSA) now allows passengers to bring full-size sunscreen bottles in carry-on bags. On Wednesday, April 7, the TSA...

India Regional Carrier TruJet Eyes Airbus A220, E2 – AirlineGeeks.com

April 11, 2021 11:43 am ET By Winston ShekIndia Regional Carrier TruJet Eyes Airbus A220, E2 In an interview with the Indian publication Money Control, Laxmi Prasad,...
Translate »