CB Insights in an overview over subscription e-commerce, which sees the number of deals declining while the amount of funding is rising (meaning on average larger deals, in case you were confused there for a second):
Startups within the space have also experienced varying levels of success. Although Dollar Shave Club made waves with Unilevers acquisition for $1B in Q316, subscription e-commerce startup BeachMint, which raised over $73M from smart money investors such as Accel Partners and NEA, went out of business at the end of 2015. Another startup, well-funded TechStyle Fashion Group (formerly JustFab), has reportedly hired bankers to explore the possibility of a sale.
We used CB Insights data to determine whether investors are still buying in to the subscription e-commerce trend.
We define e-commerce subscription companies as startups delivering nonperishable goods to customers doors on a predetermined schedule. We also include companies in subscription e-commerce enablement (companies helping retailers to set up comprehensive subscription e-commerce platforms).
More clearly are the yearly trends, showing a decline in deals but an increase in capital getting raised:
Subscription e-commerce startups attracted only 10 funding rounds in Q117, down from 16 in the prior quarter but up from 9 in Q3’16. Conversely, Q1’17 saw total dollars invested rise significantly to $82M. However, that’s still significantly lower than the quarterly record of $300M in total funding in Q3’15. The Q1’17 dollar funding increase was driven by a collection of notable deals including a $23M Series B round to Netherlands-based flower-subscription service Bloomon, a $20M Series C round to e-commerce subscription enablement platform OrderGroove, and a $17M Series A round to contact lens subscription service Hubble Contacts. Compare that to Q416, when the largest deal was a $7M round, also to Hubble.
By far the most interesting company of those mentioned above is OrderGroove. Founded in 2010, the company raised $27 million to date. (with $3 million of those being debt financing) So that Series C with its $20 million really stands out for the company. Among OrderGroove’s clients are Walmart, L’Oréal and Toys’R’us. I’m not sure OrderGroove has the chops to execute this, but there are quite a few things one can do at this level strategically. (It is certainly an interesting specialized shoptech case either way.)