Paris-based Mirakl has raised $300 million in a funding round led by private equity firm Permira valuing the e-commerce startup at $1.5 billion, the company’s U.S. chief executive officer and co-founder said in an interview.
The round makes Mirakl, which also has offices in Boston, a newly minted unicorn with a valuation of more than $1 billion. The company makes software that helps build marketplaces and online stores for customers including Hewlett Packard Enterprise Co., Kroger Co. and Siemens AG, its website showed.
An initial public offering is one of “the very serious options on this table and one of the drivers of this round,” Adrien Nussenbaum, Mirakl’s U.S. CEO and co-founder, said in an interview. “We think within a couple years we would be in a position to IPO,” he said.
Companies that power e-commerce have been boosted by the Covid-19 pandemic when consumers have shifted their shopping habits to the home. Large e-commerce provider Shopify Inc. has seen its shares more than double since March.
Nussenbaum added that the company partners with Shopify and Adobe Inc.’s Magento Commerce on connecting their platforms to third-party sellers. Permira was an investor in Magento Commerce before it sold to Adobe for $1.68 billion in 2018.
He added that Mirakl would use the investment to hire 300 engineers over the next three years.
The funding round won the attention of French President Emmanuel Macron, who lauded it in a tweet as the biggest ever for a French startup.
Permira Partner Alexandre Margoline said in a statement that Mirakl can become the “central hub and platform for digital marketplace operators, sellers and partners.” Permira is investing through its growth opportunities fund that makes minority investments in growth-stage companies.
Bruce Chizen, a former CEO of Adobe and current director at Oracle Corp., will be an adviser to Mirakl’s board. He said in an interview that Mirakl being headquartered in France is an advantage for hiring compared to Silicon Valley.
“It’s less competitive in terms of recruiting great talent,” said Chizen, who is also a growth partner at Permira.
Other investors in the round include 83North, Bain Capital Ventures, Elaia Partners and Felix Capital, bringing total capital raised by the company to $400 million, according to a statement.
Allen & Co. advised Mirakl and Royal Bank of Canada and Eurvad Finance advised Permira.
Amid the pandemic’s e-commerce boom, Mirakl has hit the unicorn milestone with $300 million in new funding. Adrien Nussenbaum, U.S. CEO and co-founder of Mirakl, breaks down what’s next for the company.
French startup Mirakl has raised a $300 million funding round at a $1.5 billion valuation — the company is now a unicorn. Mirakl helps you launch and manage a marketplace on your e-commerce website. Many customers also rely on Mirakl-powered marketplaces for B2B transactions.
Permira Advisers is leading the round, with existing investors 83North, Bain Capital Ventures, Elaia Partners and Felix Capital also participating.
“We’ve closed this round in 43 days,” co-founder and U.S. CEO Adrien Nussenbaum told me. But the due diligence process has been intense. “[Permira Advisers] made 250 calls to clients, leads, partners and former employees.”
Many e-commerce companies rely on third-party sellers to increase their offering. Instead of having one seller selling to many customers, marketplaces let you sell products from many sellers to many customers. Mirakl has built a solution to manage the marketplace of your e-commerce platform.
300 companies have been working with Mirakl for their marketplace, such as Best Buy Canada, Carrefour, Darty and Office Depot. More recently, Mirakl has been increasingly working with B2B clients as well.
These industry-specific marketplaces can be used for procurement or bulk selling of parts. In this category, clients include Airbus Helicopters, Toyota Material Handling and Accor’s Astore. 60% of Mirakl’s marketplace are still consumer-facing marketplaces, but the company is adding as many B2B and B2C marketplaces these days.
“We’ve developed a lot of features that enable platform business models that go further than simple marketplaces,” co-founder and CEO Philippe Corrot told me. “For instance, we’ve invested in services — it lets our clients develop service platforms.”
In France, Conforama can upsell customers with different services when they buy some furniture for instance. Mirakl has also launched its own catalog manager so that you can merge listings, add information, etc.
The company is using artificial intelligence to do the heavy-lifting on this front. There are other AI-enabled features, such as fraud detection.
Given that Mirakl is a marketplace expert, it’s not surprising that the company has also created a sort of marketplace of marketplaces with Mirakl Connect.
“Mirakl Connect is a platform that is going to be the single entry point for everybody in the marketplace ecosystem, from sellers to operators and partners,” Corrot said.
For sellers, it’s quite obvious. You can create a company profile and promote products on multiple marketplaces at once. But the company is also starting to work with payment service providers, fulfillment companies, feed aggregators and other partners. The company wants to become a one-stop shop on marketplaces with those partners.
Overall, Mirakl-powered marketplaces have generated $1.2 billion in gross merchandise volume (GMV) during the first half of 2020. It represents a 111% year-over-year increase, despite the economic crisis.
With today’s funding round, the company plans to expand across all areas — same features, same business model, but with more resources. It plans to hire 500 engineers and scale its sales and customer success teams.
Mirakl has its roots in France, but is also about to soar here in Greater Boston
A startup with dual headquarters offices in Somerville and Paris plans to add as many as 250 jobs in the Boston area now that it has landed $300 million in new equity funding.
Mirakl cofounder Adrien Nussenbaum, whose firm creates and sells digital-marketplace software, said the roughly 300-person company is looking to add as many as 1,000 jobs over the next three years, including 250 in Greater Boston, in part due to the surge in revenue it is seeing because of the COVID-19 pandemic. Permira Advisers was the lead investor, and was joined by existing Mirakl investors such as 83North, Bain Capital Ventures, Elaia Partners, and Felix Capital. Details of the transaction were not disclosed, but Mirakl said the latest funding round places the company’s valuation at more than $1.5 billion.
In the first half of the year, Mirakl’s North American sales doubled 2019 revenue and was on pace to quadruple it by the end of 2020. The pandemic prompted many companies to accelerate their digital shifts, including by establishing or expanding the capabilities of their digital marketplaces, in which they make items available for sale from third party vendors.
Nearly 50 people are based at the Somerville office now. Nussenbaum said he was close to signing a lease for a new US headquarters but held off once the pandemic hit in March. However, he still plans on leasing a much bigger office here.
Nussenbaum launched the company in 2012 Paris with cofounder Philippe Corrot, and moved to the Boston area in 2015 with his family. He chose to establish Mirakl’s US base here in Boston over Silicon Valley in part because of the shorter flight to France, the quality of life, and the corporate culture.
The company is setting up internal controls to prepare for a possible initial public offering within the next two years, he said.
“We view the company as a company that has long-term potential, and not a company whose natural route is to be acquired,” by a big enterprise software business, Nussenbaum said.
(Bloomberg) — Kroger Co. is setting up an e-commerce marketplace open to third-party vendors, part of the grocery-store operator’s bid to wrest web sales away from giants like Amazon.com Inc. and Walmart Inc.
The owner of the Fry’s and King Soopers chains is working with online commerce specialist Mirakl to offer tens of thousands of additional goods, including housewares and toys, the companies said Tuesday in a statement. The partnership will let Kroger offer “more-relevant products” by broadening its e-commerce operations to include third-party sellers, according to Jody Kalmbach, the company’s vice president of product experience. Kroger is looking to capitalize on growth in its digital platforms and heightened demand for essential goods as quarantined customers stock up during the pandemic. Amazon’s marketplace remains the undisputed leader in terms of selection, with hundreds of millions of products listed — but with demand surging amid the global pandemic, many merchants are seeking new online partners.
Online marketplaces let retailers offer inventory without having to buy it wholesale, minimizing the risk of getting stuck with unsold products needing markdowns. Third-party merchants typically pay a commission on each sale, and mature marketplaces like Amazon and EBay also sell advertising to merchants looking to stand out, providing an additional revenue source.
Mirakl works with retailers such as Office Depot and Urban Outfitters in the U.S., Best Buy in Canada and Carrefour in Brazil.
Kroger is expanding its ship-to-home service through a marketplace strategy that will initially source more than 50,000 products from third-party sellers, according to a company release. The move will double Kroger Ship’s current online assortment, with plans to eventually expand it further.
The expansion will focus on specialty items, including natural, organic and international products that are new to Kroger, Jody Kalmbach, Kroger’s group vice president of product experience, said in an interview. The launch will also include housewares, toys and other general merchandise timed to the fall and winter seasons. Eligible orders will qualify for loyalty rewards like fuel points. According to its website, standard shipping currently is free for orders over $35.
Kroger is working with Mirakl, a software company that has built marketplaces for retailers like Best Buy and Carrefour. CEO and co-founder Adrien Nussenbaum said more grocers are set to roll out marketplaces in the coming months.
As more consumers shop for groceries online and retailers like Amazon, Target and Walmart expand their digital marketplaces, the pressure is growing on food retailers to offer an online assortment that goes beyond what’s in their stores.
For Kroger, the focus is on offering specialty foods that would also interest the high-value shoppers the grocer has so far been able to attract with private label brands like Simple Truth and HemisFares.
“This will be new products, additional flavors, new brands that currently are not available from us, that you can get through these third-party sellers,” Kalmbach said.
She continued: “This launches us much deeper in natural and organic, international flavors, specialty foods. That is really going to be at the epicenter of what we’re doing in addition to growing key categories that are really going to matter to customers this fall.”
Natural and organic foods have been a big seller for Kroger in recent years, with more than $2 billion in annual sales and new line extensions coming from its Simple Truth brand. The company has also been able to capitalize on rising digital sales across its pickup and delivery platforms, with e-commerce sales rising 92% in the most recent quarter.
It’s also focused on integrating all of its digital platforms and letting shoppers toggle easily between shopping modes. Kroger launched its Ship service as a standalone service in 2018, and since then it has become a featured channel alongside the company’s store delivery and curbside pickup services. These two store-based services are driving online sales for Kroger, but Ship has seen a major uptick in demand from the pandemic, said Kalmbach, and the company wants to capitalize on that.
Offering endless aisles promises to further boost Kroger’s ship-to-home service and potentially make it a primary shopping destination for customers alongside delivery and pickup. It has the added bonus of being able to reach shoppers in regions like the Northeast where there are no Kroger stores.
But Kroger will have to convince shoppers to buy from its site as opposed to Amazon, Target or online specialty grocers like Thrive Market that have recently gained momentum — a challenge it is all too familiar with at this point. Over the past year, Walmart has doubled the number of sellers on its marketplace to 50,000, according to a report from Marketplace Pulse.
Adding third-party sellers has gotten messy for companies like Amazon, which has been criticized as offering unsafe and low-quality products from companies on its vast marketplace. Kalmbach said Kroger has carefully screened each third-party seller, which is initially vetted and surfaced by partner Mirakl. She said every product page will list the seller along with company information and a performance report. Nussenbaum said his company will also track seller’s performance and suspend any that aren’t meeting standards.
“Rather than being extremely aggressive and just opening up the gates, we’ve been very methodical and thoughtful about who we’re bringing on board,” Kalmbach said.
While a variety of retailers have ramped up their marketplace strategies over the past few years to compete with Amazon, U.S. grocers have remained fairly quiet on this front. One exception is Albertsons, which in 2018 launched an online marketplace offering specialty products from small suppliers.
That’s all about to change, said Nussenbaum, who is working with other grocers he declined to name on marketplace launches. As Amazon ramps up its grocery expansion through store and digital channels, marketplaces offer a valuable tool for grocers to compete, he said. He said Kroger’s integration of ship-to-home, delivery and curbside pickup into one seamless experience offers an advantage over Amazon and its separate grocery properties.
“When you shop for groceries on Amazon, you end up having multiple baskets for Prime, Whole Foods and Pantry,” Nussenbaum said. “The Amazon experience in food and grocery is still very mediocre. I think grocers can invest in marketplaces in ways that really leverage their strengths.”
Kroger is doubling down on its offerings to compete in the online marketplace this fall. The grocer is extending its Kroger Ship program to offer an extended ship-to-home assortment through a marketplace of third-party sellers powered by Mirakl.
Kroger Ship originally launched in August 2018, but with its marketplace expansion will initially feature more than 50,000 additional items across multiple categories, including natural and organic, international food, specialty items, housewares and toys. All these products are through Kroger’s third-party partners.
“Our customers are increasingly turning to our e-commerce solutions provided at Kroger.com for their grocery and household essential needs. To better serve our customers, we’re continuing to invest in technology that enables us to expand our digital services to deliver anything, anytime, anywhere,” said Jody Kalmbach, Kroger’s group vice president of product experience. “Leveraging Mirakl’s best-in-class marketplace solution, we are broadening Kroger’s ship-to-home capabilities by offering more relevant products for our customers through exciting new partnerships with reputable third-party sellers.”
In Kroger’s first quarter 2020 results, its digital sales grew 92%, and this is another way the grocer is planning to strengthen its e-commerce strategy.
“The expansion of our Kroger Ship platform will continue to bring together our industry-leading customer insights and merchandising data to offer our customers a digital shopping experience that includes staples available in our physical stores as well as products that are exclusive to Kroger.com,” said Stuart Aitken, Kroger’s senior vice president and chief merchant and marketing officer. “As part of our continuing transformation, we look forward to accelerating the development of our e-commerce platform and providing our customers with even more choices.”
Although Kroger’s launch of 50,000 additional products is nowhere near the scope of Amazon and Walmart, which are both in the millions, the grocer’s partnership with Mirakl might just be the first step in such a plan.
“Kroger has long been a retail giant, and by integrating an online marketplace into its leading eCommerce experience, Kroger is continuing to lead from the front,” said Adrien Nussenbaum, CEO and Co-founder of Mirakl. “It’s clearer than ever that digital marketplaces are the foundation of the next generation of commerce, and we look forward to supporting Kroger as it takes advantage of this opportunity.”
Cincinnati-based Kroger employs nearly half a million associates who serve 9 million-plus customers daily through a seamless digital shopping experience and 2,800 retail food stores under a variety of banner names. The company is No. 3 on The PG 100, Progressive Grocer’s 2020 list of the top food and consumables retailers in North America.
Using an online store, the company has seen parts sales increase by 220% year-over-year.
Savvy companies are adept at leveraging their strengths to meet changing demands.
And that’s just what Toyota Material Handling, USA Inc. (TMH), one of the largest manufacturers of industrial equipment, did when it saw that pure-play eCommerce companies were moving into the aftermarket parts business and doing well.
This was a wake-up call for the company to up its game and push forward more quickly with their digital transformation strategy.
“There are two different avenues when it comes to using eCommerce for the aftermarket business,” explains Nick Ostergaard, manager of Digital Transformation for TMH. “You can get into the direct selling game, or you can figure out a way to leverage your expertise. Because we have a strong reputation with a large customer base, we wanted to make sure that our customers were dealing with us, and not a third-party when it came to this area of the business.”
Rather than customizing its current eCommerce platform, TMH chose to work with Mirakl, a solution provider’s platform. “Partnering with Mirakl was a way to avoid any channel conflict, and also a good way to leverage the strength of our dealerships,” says Ostergaard.
Then in 2019, TMH launched its B2B parts online marketplace also built on the Mirakl Marketplace Platform. The portal, called MyToyotaStore, fulfills orders through the company’s network of authorized material handling dealers.
“It was critical for our authorized dealers to join us online in an effort to upgrade the customer experience in the material handling industry,” said Ostergaard.
Upgrading the customer experience is especially important as the use of eCommerce is now well-established. Forrester, the consulting firm, has reported that nearly 90% of business buyers are currently purchasing through an online marketplace.
In addition to the integration of that technology into the buying cycle, those who purchase the company’s customers are increasingly younger and very adept at eCommerce. “We need to be attractive to the next generation of b2b buyers who have grown up with online ordering,” says Ostergaard.
This strategy is working for TMH as the company has seen a 220% increase year-over-year with online parts sales. And one interesting statistic is that 70% of online sales are new customers.
Of course, going digital presents challenges as well. Often mature organizations are slow to adopt new ways of doing business but Ostergaard says that trial and error is the best way to adapt to new techniques.
He offers this advice when embarking on a digital transformation. “ Make sure that you engage early and often with senior management when trying new systems,” advises Ostergaard. “Involve all areas of the organization by using an advisory council structure so that there is one source to funnel information from across the company.”
Many major retailers have struggled to successfully operate their own ecommerce channel. The economics of ecommerce are fickle, to say the least. But there is a business model that could help embattled retailers to adapt to vastly different shopper demands that this era has brought about: for retailers to launch and operate their own online marketplaces. A software provider in that space, Mirakl, has turned that concept into a credible solution over the past few years.