- E-commerce is booming, but that doesn’t mean it’s a slam dunk for investors.
- One of the most popular economic goals of 2021 is playing now, according to experts.
- Coming down from cancer starts thinking about what technology needs.
There are many ways to make money online. Last year, investing in e-commerce was one of them.
E-commerce has not been a cash cow for most retailers. Logistics is the most common factor in attracting customer revenue. That’s why there are technologies and services that enable faster, better, and easier e-commerce fulfillment – consider fulfillment, logistics, and delivery services and software – has been a magnet for investors in recent years.
But since consumers started shopping in stores willingly, e-commerce startups are on the ropes. And investors are paying close attention to their success today – starting the path to profit.
The overall investment of e-commerce startups – from the pre-sale technology designed to record orders, to the post-sale technology to track and fulfill deliveries – has decreased dramatically. in 2022, with the amount decreasing each quarter. But business profits are better than pre-pandemic levels, according to Pitchbook.
The idea that e-commerce will continue to grow, and that adherence to it will lead to a rising tide, has not survived the epidemic. The way forward is better and more ready to manage if investors want, according to experts published by Insider.
The last of the mega-rounds – for now
Mega-rounds, such as Veho’s $170 million Series B in 2022 and ShipBob’s $200 million Series E in 2021, could be the last sight for the foreseeable future, according to Steve Sloane of Menlo Ventures (a ShipBob investor).
Big funds such as SoftBank and Tiger Global, which manage these mega-rounds, have pulled back the reigns in the past year.
“I think we’re probably more interested in some of these types of mega-accelerants versus temporary accelerators,” Sloane said of investors in general.
The explosion of entire sectors of startups, such as fast delivery and Amazon, has further demonstrated the boom-and-bust nature of e-commerce investment.
According to PitchBook, most of the money last year went to startups based on the technology behind the actual sale of goods on the Internet – not the right technology before and after perhaps last.
On the marketing front, Sloane said changes beyond the startup’s control have changed the math.
Apple’s recent moves to give consumers online privacy have ripples through the e-commerce ecosystem, leading investors to comply.
“The risks are very real,” he said.
And on the delivery side, good startups and bullish moves by incumbents such as UPS, FedEx, and even the US Postal Service have shaken the magic eight-ball. E-commerce logistics – the fulfillment and delivery of the last mile – Sloane said is now well-stocked, he said.
“It’s going to be a challenge for new entrants, especially in a town that we’ve already covered,” Sloane said.
Several startups in the area will be finished this year and beyond, Sloane said.
Where to find growth
“My personal opinion is that e-commerce is growing,” said Derek Lossing, an Amazon Logistics alum who advises investors. “I think what we’re doing now is that there are companies out there, and there are a lot of investors out there, asking what do we need from the technology?”
Lossing said that investors are asking two important questions so that they can fly during the boom – they are looking for new companies to bring in customers.
Today, investors need to know if a startup solves a problem that consumers will spend money to solve. And if the first answer is yes, can they provide the right solution? Although that second part was considered a few years ago, it is not now.
It is not yet time for e-commerce investors to give up, he said. A break for the mind.
Jessica Ramirez, a senior research analyst at Jane Hali and Associates, said another factor that will drive value for investors and consumers going forward is combining online experiences and including the shop.
For many retailers, the pandemic has made a significant contribution to the integration of their stores and not to their website, he said.
Target is an example of a retailer that is truly prepared with digital tools that create a fluid connection between the online store and the stores, according to Ramirez – leading the public press to call It is said to be the “winner” of cancer.
The result: “We’ve seen consumers wake up,” Ramirez said.
So the investments are going, he thinks. But technology investments from a large company take time. He now describes it as a “shakeout.”