The Future of Commerce 🛍️
The Artemis Fund believes technology can create prosperity for all, but it’s not possible without diverse perspectives. Artemis leads seed rounds for diverse tech founders with wild ambitions in fintech, commerce, and care building the economy of the future.
The pandemic supercharged the adoption of digital commerce, and consumers now expect quick deliveries, seamless returns, and personalized shopping experiences. Simultaneously, businesses face stubbornly high inflation, increasing labor costs, and supply chain disruptions. Small businesses, the drivers of our economy, are particularly vulnerable to these challenges. The sophistication and technology required for businesses to meet consumer demands and compete are rapidly evolving.
Whether it’s digital commerce ($17.5T by 2030), retail tech ($112B by 2029), or e-commerce enablement ($18.7B by 2026), the markets within Artemis’s commerce enablement investment thesis are vast and growing. Artemis expects an explosion in new e-commerce infrastructure and technology that seamlessly blends the physical and digital retail experience. Here are some of the commerce enablement themes we’re most excited about:
- Customer Data — New data privacy regulations have limited visibility into customer data and increased customer acquisition costs. Segment, a company that manages and activates customer data for brands, was recently acquired by Twilio for $3.2B. Companies like Velvet, Digiphy, and Brij are at the forefront of empowering businesses at every stage to own their customer data, opening doors for enhanced engagement and personalization.
- Loyalty — In the face of rising customer acquisition costs, it is more important than ever for brands to deepen relationships with their existing customer base. Research shows that up to 40% of a brand’s revenue often comes from just 8% of its most loyal customers. Subscriptions and memberships stand out as good options to maintain monthly revenue amidst economic instability. Companies like Govalo are enabling rewards and post-purchase relationships with consumers.
- Financing — Over half of small businesses are currently unable to meet their capital needs. Small businesses with <$1M in revenue find it nearly impossible to secure financing. Recently, Austin-based 8fig raised a $140M Series B to help e-commerce companies grow by providing inventory financing. Other major players like Pipe and Capchase have received significant funding, while early-stage companies like Bonside and Artemis portfolio company Fundid are building solutions for the needs of small businesses.
- E-commerce Infrastructure — Industry giants like Shopify and BigCommerce have provided the foundation for building and managing digital storefronts. Many startups are building tools that are extensions of these storefronts. Carro, which raised a $20M Series B to enable cross-store selling and influencer commerce, built their business on top of Shopify’s infrastructure. Pietra, which raised a $15M Series A, offers an all-in-one solution for sourcing, fulfillment, and omnichannel sales. Other companies have found new, underserved niches. For example, Artemis portfolio company Paloma is bringing embedded payment and customer management tools to live social sellers.
- Return Logistics — Online shopping is the new norm, but return logistics places a massive burden on retailers. Customers return 25% of online purchases, compared to <10% in-store. Now, retailers are pushing for in-store returns and charging customers for mail-backs. Some retailers are even offering free returns in exchange for signing up for their loyalty program to gather customer data.
- Supply Chain — 70% of businesses say they’ve been negatively impacted by supply chain challenges. In response, companies are holding more inventory, diversifying product sourcing, and limiting returns. Ghost, an excess inventory marketplace, raised a $13M Series A after coming out of stealth. Faire, a marketplace connecting indie brands and retailers, was valued at $12.6B in 2022. Artemis portfolio company Max Retail has unlocked a large market with new distribution channels for retailers to offload unsold inventory.
Learn more about the companies in our portfolio on our website. If you’re a founder innovating in fintech, commerce, or care, pitch us here!
