Israeli startup Yotpo, which develops a platform for promoting E-commerce sites, announced a $75 million E funding round, led by Bessemer Venture Partners, while Vertex Ventures, Access Industries, and Hanaco all participated as well in the round.
Since it was established, Yotpo has always focused on E-commerce websites provisioning them with consumer review system that enables sharing reviews across social media and search engine platforms. Yotpo has been pretty busy over the past two years, acquiring different tools to offer customers new capabilities. In 2018, Yotpo acquired Swell Rewards, which enabled the E-commerce giant the ability to offer customers a loyalty program, so each company can build its own follower base and provide them with rewards of all kinds. In addition, Yotpo also got from the same deal the option to provide customers with a referrals system, that awards existing customers with rewards for bringing on a new user.
At the very start of 2020, Yotpo purchased SMSBump, which gave it the power of pushing marketing campaigns through text messages. This way E-commerce stores could increase customer retention and service, provide live status updates on purchases, sales, and customized notifications. Furthermore, the company launched a system to create simple galleries, as well as an analytics system. Bringing together all these tools should help E-commerce businesses attract more customers, which is the ABC of operating any kind of store, whether online or in the physical world.
COVID brought hesitation to the investor mind
Yotpo reports that since its 2017 funding round, the company has witnessed an immense growth spurt with a 300% increase in customers and a 250% increase in Annual Recurring Revenue. Moreover, the company presents an impressive list of customers including a few market leaders like Steve Madden and Patagonia. To date, the Israeli startup has shown continuous success in recognizing potential and forming a strong client list, however, the driving force behind those advantages is the company’s success in the fundraising department, bringing in around $176 million in total since it was founded.
In a conversation with Geektime, Yotpo COO and co-founder Omri Cohen, that over the last 3 years the company has tripled R&D capabilities with four R&D centers in Israel and Bulgaria. “We built a very strong data infrastructure, and we see that data-scientist teams use our enormous database to optimize our customer offered products,” Cohen explains.
“We set out on the round with worrisome thoughts,” admits Cohen. “Following the limitations put in place due to COVID restrictions, investors were a little worried, and the flight ban didn’t help to calm the situation as now in-person meetings were impossible. So, we focused our efforts on investors we had already met, those we had a trust base with, and that we thought a physical meeting wasn’t a necessity to close the deal. Cohen reveals that investors took a step back initially, hesitating, before eventually buying in throughout the process: “we realized that Yotpo was sitting on an intersection of 2 categories that are experiencing accelerated growth because of the COVID-19 pandemic: Saas and E-commerce. As a result, this created tremendous interest from investors, which in turn forced us to reject a lot of VCs from joining the round.”
Yotpo was founded in 2011 by Tomer Tagrin and Omri Cohen. The company has offices in Tel Aviv, another location near Haifa, New York, London, and Sofia, that staff a total of over 500 employees.