With U.S. e-commerce activity approaching 10% of all retail sales, more merchants are shopping around for easy-to-use platforms that get them selling online quickly.
Plenty of technology companies are angling for a piece of the action, from established players such eBay’s Magento , IBM , and NetSuite to smaller developers including Shopify and Volusion. But relative underdog Bigcommerce is stealing mindshare and market share, fueled by more than $75 million in venture capital, including $40 million from entrepreneur Steve Case’s Revolution Growth firm.
In the past six months alone, the Australian-born company fortified its senior executive ranks with high-profile hires from Amazon, PayPal, Google, and Twitter. It brokered a high-profile deal with Magento, the market leader, that promises to bring thousands of new customers to it. And it broke the lease on its new San Francisco office because it is hiring so quickly that it now needs triple the space it originally anticipated.
“It’s eerie how similar this space is to CRM when Marc Benioff launched Salesforce.com,” said Mitch Harper, who co-founded the company in 2009 with co-CEO Eddie Machaalani. “The parallels are uncanny.”
This year, online storefronts will generate an estimated $294 billion, or approximately 9% of all U.S. retail sales, according to forecasts by Forrester Research. By 2018, e-commerce will account for more than 11% of the total, or approximately $414 billion, with transactions made with tablets and smartphones accounting for about 20% of the online total, Forrester projects.
Until now, the appeal of Bigcommerce’s eponymous technology has been simplicity and its ability to scale along with merchants as they grow. “To some, this will mean the difference between success and failure,” said Steve Case, who as a board member advises Bigcommerce on U.S. entrepreneurial trends. “Even just five years ago, if you wanted to create a compelling offering, it could cost hundreds of thousands of dollars. Now, you can get up and running in hours for less than $100 per month.”
Bigcommerce does particularly well among small retailers generating $1 million to $2 million in annual revenue, although its following with those in the $20 million to $30 million range is growing quickly. Roughly 70% of its existing customer base also runs a bricks-and-mortar store. For the past year, the developer has worked hard on responsive storefront templates that work equally well on mobile platforms and desktops—design is the number-one consideration for small e-commerce merchants, it says—and on relationships with partners of “adjacent” cloud services from the accounting, payments, customer relationship management, and payroll management worlds.