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ServiceTitan acquires Aspire to move into landscaping, raises $200M at a $9.5B valuation

With a lot of us spending more time at home these days, home improvement has continued to be a booming market. Now, one of the big players in that space — ServiceTitan, which builds software that today is used by over 100,000 contractors to manage their work — is getting a little bigger.

The company — which also works with contractors that work on business properties — is acquiring Aspire Software, a software provider specifically for commercial landscapers. Along with that, ServiceTitan is announcing another $200 million in funding, a Series G that values that company at $9.5 billion.

The funding is being led by a new backer, Thoma Bravo, with other unnamed existing investors participating. (That list includes Sequoia, Tiger Global, Dragoneer, T. Rowe Price, Battery Ventures, Bessemer Venture Partners and ICONIQ Capital.)

Los Angeles-based ServiceTitan is not disclosing the financial terms of the deal, but it comes on the heels of the company raising $500 million only in March (when it was valued at $8.3 billion) — money that it earmarked at the time for acquisitions.

ServiceTitan also confirmed that this is its biggest acquisition yet, which roughly puts this deal in the hundreds of millions of dollars. Aspire will stay based in Missouri to build out the company further from there.

Aspire itself has some 50,000 users and sees $4 billion in annualized transactions on its platform across areas like landscaping, snow and ice management, and construction. It has never disclosed a valuation, nor how much money it has raised. The St Louis, MO company was previously backed by growth equity firm Mainsail Partners.

The deal underscores not just how much scale and opportunity remains in building technology to serve the home services space, but also what might be a consolidating trend within that, where a smaller number of companies are building technology for contractors and others in the space working across a number of adjacent and related verticals.

ServiceTitan is already bringing in annual recurring revenues of $250 million — a figure it shared in March and hasn't updated — and as of that month, it had grown 50% over the preceding year. Part of that growth is based on simply more usage of and demand for its software, but part of it also has to do with the company expanding what it covers.

ServiceTitan got its start in residential plumbing, HVAC and electrical — the areas where the the two founders Ara Mahdessian (CEO) and Vahe Kuzoyan (president) went first because they knew them best from their own family businesses — but expanded into areas like garage door, chimney and other areas, as well as commercial property, on its own steam.

In other markets like landscaping or pest control, the expertise is more specialized, however, so it makes sense to make acquisitions in those areas to bring in that software, and teams to manage and build it, to further diversify the company. (ServicePro, a pest control company, was acquired in February.)

ServiceTitan said that its contractor customers have made more than $20 billion in transactions in the last year, but with the wider industry of contracting repair and maintenance services estimated to be worth $1 trillion, there is obviously a lot more potential. Hence expanding the range of areas covered in the industry.

“Both Aspire and ServiceTitan were born out of a desire to improve the lives of contractors who work tirelessly to serve their communities, but who have historically been underserved by technology,” said Mahdessian in a statement. “Mark and his team at Aspire have more than 500 years of combined experience in the commercial landscaping industry. Just like we built ServiceTitan to solve the problems our fathers faced, it’s that first-hand industry knowledge that has enabled Aspire to build the most powerful software in the industry with the highest customer satisfaction.”

Thoma Bravo has been making some prolific moves to take majority positions in a number of older tech companies in recent weeks (see QAD, Proofpoint and Talend for three examples among others). This, however, is a growth investment that is coming as many wonder when and if ServiceTitan might go public.

I'll hopefully get a chance to ask Mahdessian about that later but in March he hinted that an IPO might come later this year or latest by the end of 2022, depending on market conditions. This Series G round implies perhaps stretching to the later part of that timeframe.

“As the fastest-growing software solution for the trades with an unrelenting focus on customer success, ServiceTitan is poised to extend its leadership and capture increased market share as the industry exceeds $1 trillion globally,” said Robert (Tre) Sayle, a partner at Thoma Bravo, in a statement. “ServiceTitan’s expansion into landscaping, a more than $100 billion market in the US alone, is an important step on its path to provide all home and commercial tradesmen with the tools they need to grow and manage a successful business. We are excited to partner with ServiceTitan and to leverage our software and operational expertise to accelerate the company’s growth and build upon its strong momentum.”

There are a number of companies playing in the wider home services market that speak to the opportunity ahead. Companies like Thumbtack are digging deeper into home management, providing a bridge to contractors to fill out the work needed (and also providing them with the software to do so), while companies like Jobber and BigChange, which have also raised recently, are also looking to build better software to manage individual and fleets of contractors and their fleets.

ServiceTitan, the biggest of the software players now, is likely going to continue making more deals to grow its own empire, but it added that it will also be using the funding to expand more organically, with investments into customer service, R&D, and to hire more people across the board.

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Does anyone know how to resolve “Price of products in the cart may have changed.” on Snipcart?

I'm getting this error through every time I click checkout with paypal.

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BigBuy expands catalogue with supermarket products

BigBuy has expanded its dropshipping catalogue with a new product category. Online retailers can now also sell foods and drinks online through the dropshipping platform of BigBuy, giving them the opportunity to start their own online supermarket.

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Opinions on this e-commerce service I am releasing soon.

I have worked in e-commerce development and SEO for around 12 years. I have a pretty full book of clients and several employees at this point, but the daily grind is grinding me down. So after looking at our clients, what their pain points are, and how to make their businesses easier, I have decided to release our first standalone software product.

The niches that most of our clients are in cater to older people who are not tech savy, think walkers, mobility scooters, rv parts and accessories. Basically things that appeal to older people. One of their biggest customer service issues is people calling wanting shipping updates. Even though they use all of the fancy apps that send emails, allow tracking from their site, ect. They still get a ton of calls.

So I am releasing a service in the next week or so that allows a shop owner to sign up, it will assign you a phone number, and you can enter friendlier translations for your order statuses. This is a phone number that you ca either provide customers direct access to, or you can put it on your extension tree.

What the whole service centers on is allowing people to check the sipping of their orders without having to tie up a CSR body. We already have several clients running it during a beta test and it is freeing up a lot of phone time for their employees.

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Amazon Makes Play for Vinyl Lovers With New Record Club

The service, available for U.S. customers only, sends monthly subscribers during each billing period a classic album from the 1960s and '70s by artists such as Pink Floyd, Aretha Franklin and ABBA. “The Vinyl of the Month Club will help new fans start to build a collection of some of the greatest LPs ever,” Amazon Music spokesman David Marek told the E-Commerce Times.

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Decathlon UK shifts to marketplace model

Decathlon UK has opened its website to external vendors. The sports retailer invites new partners to join its marketplace, so customers get access to thousands of more sporting goods.

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Shogun, a front end e-commerce page builder, nabs $67.5M as retailers look for alternatives to marketplaces

E-commerce marketplaces continue to play a major role in how consumers buy goods online and how retailers show off and sell goods to those consumers, accounting globally for 47% of all e-commerce sales. But today, one of the startups that has built technology to help retailers build and run more direct relationships — by way of zippy websites of their own — is announcing a big round of growth funding, a sign that the marketplace model is not for everyone, and that those catering to those retailers are finding traction.

Shogun — a platform to help e-commerce businesses of all sizes built on platforms like Shopify, Magento and BigCommerce easily design and run their own responsive storefronts — has raised $67.5 million. This Series C values Shogun at $575 million, a “nice markup” on its previous valuation, said Finbarr Taylor, the company's co-founder and CEO, in an interview.

He added that the capital will be used both to continue building out its two main products — Page Builder, a drag-and-drop page builder for Shopify merchants; and Shogun Frontend, an end-to-end headless commerce solution — as well as business development, and to build out new tech, specifically in areas like first-party data and personalization.

“We want to help companies build a destination where they can control the experience,” he said, comparing it to the physical world and the difference between Nike shoes sold at the brand's own store versus at a big retailer like Walmart. “In a Nike store you can design an experience. In Walmart you cannot.”

Led by Insight Partners — a new investor in the startup — it also included Initialized Capital, Accel and VMG Partners. Accel led Shogun's previous round — a $35 million Series B — announced less than a year ago, in October 2020. The startup has now raised $114.5 million.

The hike in valuation, and the rapid succession of its fundraises, are two signs of how Shogun has been doing in the last eight months — a time when e-commerce has continued to perform strongly in the wake of the Covid-19 pandemic. Another is the company's actual growth based on the idea of making front-end tools that used to be cost-prohibitive into something affordable for even the smallest merchant.

One of the selling points for Shogun up to now has been that pages and sites built on its platform run fast: a very key detail in the world of e-commerce where shopping cart abandonment is rife and often hinges on how long people have to wait for something to load.

Page Builder — the mass-market, drag-and-drop site builder for those creating sites on top of Shopify — is now used by around 20,000 business, Taylor said, ranging from small startups through to Fortune 500 companies, with customers including brands like K-Swiss, Leesa, Rumpl, BeardBrand, MVMT and Fila. He said that merchants collectively are seeing GMV (gross merchandise value, or total amount sold) in the “billions of dollars” through their sites.

(For a point of reference, Shogun told me it had 15,000 customers back in October; growing 5,000 in the last eight months is the same amount of growth as last year.)

Shogun's newer product, Frontend, designed for mid-market to enterprise customers and positioned as a “headless” solution aimed more at web designers and others building more customized experiences, now has hundreds of customers and grew . “Apple's site is beautiful, but it cost millions to make,” Taylor said. “We want anyone to be able to build those exceptional e-commerce experiences.” Frontend has grown 10x in the last year, Taylor said.

GMV across all of Shogun's business grew by 255% in the last two years.

The rise of services like Shogun's underscores a swing we have seen among e-commerce companies that are looking for a more autonomy and control in how they engage with customers. Sites like Amazon have long been seen as a way to tap into a large population of shoppers, as well as solid fulfillment and shipping infrastructure to store, package, distribute and deliver products.

There has even been a sharp rise in “roll-up” plays like Thrasio to help consolidate merchants on these platforms to leverage even better economies of scale on details like marketing, customer analytics and manufacturing, which marketplaces like Amazon do not (yet?) handle.

But none of that still replaces the ability to set your own destiny.

Now, the rise of services like Shopify, BigCommerce and Spryker (also backed by Insight Partners) to help manage the backend; Stripe, PayPal and others to manage payments; and others like ShipBob to manage the logistics, have made it increasingly less difficult to build and run your own online experience. That takes on a stronger priority as your business grows, but even for smaller merchants, the idea of controlling your own customer experience is a compelling one.

Services like Shogun (and others like fit into that latter trend, such as Squarespace or Wix but also others like Duda), which give merchants the tools to build their own e-commerce experiences as they would like them to look, are the front ends for that strategy. Opting to take the “headless” commerce approach, apparently, is an increasing trend.

And that individualism is also where Shogun plans to double down and build more tools for its users, Taylor said.

“It's all about direct relationships with customers,” he said, pointing out that newer changes in privacy regulation and cookies going away mean retailers can no longer rely on third-party platforms as they used to. “It's about first party relationships. The future is way more personalized shopping online.”

That vision is also what interested investors.

“Our investment in Shogun underscores the market’s desire to see headless commerce become merchant-focused,” said Matt Gatto, managing director at Insight Ventures, in a statement. “More brands want to be able to build headless progressive web apps in a low-code environment. Those on the forefront of e-commerce want to enable web teams to build truly unique, memorable shopping experiences. Shogun is well positioned to make flexible frontends accessible to brands in a whole new way, and we’re excited to be a partner in this journey.”

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June 2021 Top 10: Our Most Popular Posts

Our mission since 2005 is to publish independent content to help ecommerce merchants. What follows are the 10 most popular articles that we published in June 2021. Articles from early …

The post June 2021 Top 10: Our Most Popular Posts appeared first on Practical Ecommerce.

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How You Get eComm Clients?

Hey guys, I am new into this field. I have an agency, where I manage and grow small companys Instagram pages. I am wondering, how you guys get your clients? I tried different strategies but got a few clients. Any suggestions will be highly appreciated. Thanks!

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Just lost our biggest eCommerce client who made up 25% of our monthly revenue. Here’s where I think we went wrong…

I’m gutted. I just had a call with our biggest client.

They’re canceling their service with us.

We had been working together almost 18 months. And during that time they scaled up their service to more than 3X a normal client and currently make up about 25% of our revenue.

My main contact is 1 of 3 partners. He’s not happy about it. But there are some internal politics forcing them to make the move.

I honestly never thought this would happen. We’ve brought an insane amount of value, helping increase previous 12-month CR of 0.6% to a steady 1.7% rolling 6-month average.

I’m still in shock as I write this post.

But I would love feedback on where I made mistakes:

1) Invested in infrastructure, team + tools for a single client without a long-term agreement

2) Dont have sales/marketing strategy to build pipeline and plan for churn (working currently)

3) Focused too much on scaling current relationships instead of finding new clients

It sucks.

But this is a reality check. And an important lesson in business.

PS

I never pitch.

But if there are any eCommerce stores looking scale up their CRO work, we have an AMAZING team and some excess capacity at the moment 😜

Our ICP is $1M to $10M stores in the health, wellness & fitness niche.

(Admins. If this is against the rules. I’m sorry. Please let me know)

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