Tradeswell, the ecommerce tech startup where former Millennial Media CEO Paul Palmieri joined as CEO earlier this year, raised $15.5 million in fresh funding, the company said this week.
The Series A comes after the company launched its platform, which it describes as an ecommerce operating system for brands, in October. And it’s just six months after the Baltimore and San Francisco-based company raised $3.3 million seed round that was disclosed in July.
Like the seed round, the latest funding was led by San Francisco-based investment firm Signal Fire. Chevy Chase-based venture firm Construct Capital also returned in this round to increase its investment in the company. New investors Allen & Company and The Emerson Group joined this round, as well.
The company’s software platform is seeking to address the economics of ecommerce, which Palmieri said is a challenge both for brands that might be familiar from retail stores, and direct-to-consumer brands that are seeking to sell their products through digital marketplaces.
“In the case of the traditional companies, they are selling products like mad on Amazon, but were so unprepared to deal with last-mile marketing and last-mile delivery, that they signed up with black-box, siloed enablers. As a result, they find it difficult to operate in the context of their true unit economics,” he said.
“DTC brands, on the other hand, are certain of their unit economics, but have no idea how to leverage the economics of scale,” Palmieri said, adding that this runs across financing, manufacturing and tracking the many tools and channels within ecommerce.
The company’s platform reveals and automates actions for these brands to make decisions smarter and faster. That helps to grow sales, margins and profits and, in turn, the entire business.
It does this by aggregating data across ecommerce channels, marketing platforms, logistics, sales, and finance functions. Then, it surfaces insights, and automates some of the actions through AI. The idea is that this can provide the visibility of an entire business that will help drive growth, and react to marketplace movements.
The company has 150 brands in both categories on its platform, including iconic Baltimore company McCormick and fair trade company Tony’s Chocolonely. It was working with many through the holiday season. Palmieri, who led Baltimore adtech company Millennial Media through its 2012 IPO, sees a big market in a $3 trillion industry, which has only grown in the pandemic. He also sees it as a field where software can play a big role. While there are growing startups making software that addresses specific parts of the whole and services companies helping with strategy, Palmieri sees a need for a “brain.”
“In time, like in any high-speed, high-volume industry that has been transformed by software, an agnostic, algorithmic facilitator ends up helping the market to know what to do — at the speed of the market,” he said. “What Bloomberg did to revolutionize trading, what Google did to liquify information, Tradeswell’s algorithmic trading platform will do for ecommerce brands. Like the floor teams on the NYSE today, ecommerce will still need some fingers and some services, but it definitely needs a software brain.”
Following the funding, the company will continue to develop its technology, including further investment in artificial intelligence, quantitative trading and ecommerce integrations. It is also seeking to hire to add to its team of 25 people in areas such as data science, engineering and sales. Currently it has 20 roles open.
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