Barely more than seven months after its most recent funding announcement, Yotpo is revealing that it has raised another $230 million in a Series F round that values the company at $1.4 billion (post-money).
“Our round, in my eyes, it’s all about celebrating the future of e-commerce,” co-founder and CEO Tomer Tagrin told me. “Brands don’t need to worry about connecting the marketing stack anymore.”
Where success in traditional retail has been determined by “location, location, location,” Tagrin said e-commerce is “all about consumer attention.” To capture that attention, he estimated the average brand is using 10 to 14 different marketing applications, creating a “pretty horrible experience.” So Yotpo — founded in 2011 and headquartered in New York City — aims to provide all of a brand's e-commerce marketing needs in a single, integrated platform.
To illustrate this, Tagrin described a marketer wanting to create a customized offer just for users who had both purchased a product in the past 90 days and left a five-star review. Yotpo allows them to do that with “just the click of a button,” whereas “that experience was just not feasible before Yotpo,” he said.
The platform currently consists of four main products — Yotpo SMS Marketing, Yotpo Loyalty & Referrals, Yotpo Reviews and Yotpo Visual UGC — which integrate with each other, as well as with e-commerce platforms such as Shopify, Salesforce Commerce Cloud, Adobe-owned Magento and BigCommerce.
Tagrin said Yotpo still had money leftover from the last round but it decided to raise additional money to continue investing in product and marketing, as well for strategic acquisitions. (The company acquired SMSBump at the beginning of 2020 and Tagrin said it's “70% of the way there” towards full integration.) Among other things, the company is planning to launch new products around customer communication and measuring a customer’s lifetime value.
Yotpo also says that it has now exceeded $100 million in annual recurring revenue, with the SMS marketing product growing revenue by 170% last year, while the loyalty product saw its revenue nearly double. Big brands like Patagonia and Steve Madden use the platform, but Tagrin pointed out that it’s also used by newer direct-to-consumer businesses like Princess Polly and has 30,000 paying customers over all.
“I like to say that Victoria’s Secret will die by a thousand cuts,” he said. “These are the mini-brands … the up-and-comer brands that are going to replace the incumbents.”
Yotpo has now raised more than $400 million in total funding, according to Crunchbase. The round was led by by Bessemer Venture Partners and Tiger Global, with participation from Claltech Investment, Coin Ventures, Hanaco, Vertex Ventures, Vintage Investment Partners, Capital Group and others.
“Tiger Global has long been bullish on eCommerce as the future of retail, having invested in disruptor brands like Warby Parker and Peloton, giants like JD.com, and best-in-class SaaS companies like Stripe and Twilio,” said Tiger’s John Curtius in a statement. “We are excited by Yotpo’s approach to provide a unified marketing tech stack and the value it provides to brands and online shoppers in the process.”