Dear friends and colleagues,
The pace of change in the Digital Retail Ecosystem continues at an increasingly rapid pace. Traditional retailers have now embraced this change and are responding aggressively to the changing landscape by adopting new technologies and making bold plans for the future of retail. As you look forward to another dynamic year in 2019, please reach out to ComCap LLC to help solidify your strategic plans and financial roadmap. We would be pleased to share what dynamics we are currently experiencing throughout our Ecosystem, and are eager to work with you to interpret their potential effects on your business.
As the year winds down, we wanted to reach out and share our perspectives on the state of the Digital Retail Ecosystem for the close of 2018. ComCap regularly publishes detailed research pieces highlighting key trends driving market activity across the Ecosystem.
We’ve added a new piece on Geospatial Analytics to our content library – it contains a host of insights on this rapidly evolving sector including fundraising map, key legacy players, and rising stars within the sector. We hope you find it useful!
The Digital Retail Ecosystem is constantly evolving, consolidating, and responding to the new rule of order in “The Age of Amazon” – This report sheds light on the ways the large strategic stakeholders are adapting to a shifting landscape through consolidation and the catalysts behind these strategic events. Furthermore, as financial sponsors continue to invest at torrid rates, we highlight some of the notable financings in a host of different sub-verticals that comprise the Digital Retail Ecosystem – Specifically:
- AI and Analytics
- AR, VR, and Content Creation
- Beauty, Health, and Wellness
- Digitally Native Vertical Brands (DNVBs)
- Retail SaaS
- Financial Technology
- Marketing suites
- Outsourcing and service providers
- System Integrators
These pieces are distributed to and read by a host of Financial and Strategic investors across the digital retail landscape.
Other Highlights Include
- Market maps and associated fundraising amounts for up and coming disruptors
- Individual profiles for both the most watched and under the radar promising companies within each sub-vertical
- Relevant financings and transactions within each sub-vertical
ComCap generates successful outcomes for our clients by leveraging our transaction expertise, domain knowledge, and our unique ability to articulate (and negotiate for) potential synergies on their behalf. If you have any questions about the report, please Email Aron (Aron@comcapllc.com) or feel free to call directly at 415-235-8270.
Thank you and Happy Holidays
The ComCap Team
San Francisco, March 2018
ComCap LLC, the leading digital retail investment banking boutique, is proud to announce it acted as the exclusive advisor to Astound Commerce, the world’s largest privately-held digital commerce agency, on its merger with Fluid, a leading digital customer experience and software solutions company.
Founded in 2002, Fluid is an award-winning digital customer experience firm offering design, CX, UX, digital marketing, and digital strategy services. The company specializes in ecommerce and works to create digital flagships and direct-to-consumer businesses for clients such as The North Face, Puma, Oakley and many more.
Post-transaction the company has over 800 staff and provides a complete suite of strategy, customer experience and implementation services for brands and retailers and has proven implementations in over 30 countries.
“We are delighted to close our merger with Fluid under ComCap’s guidance,” said Igor Gorin, Co-Founder and CEO of Astound. “The team’s expertise in retail and digital agencies was a tremendous asset throughout the process. Their global relationships and experience in the space is second to none. We look forward to leveraging ComCap’s competencies to cement our position as the largest privately-held eCommerce agency through additional aggressive expansion.”
“We were pleased to advise Astound on this important transaction. Having worked on agency transactions in the United States, Western Europe, Asia and Latin America with both local players and major global holding companies, we believe Astound is the largest privately held ecommerce agency and this transaction further strengthens their leadership position,” said Aron Bohlig, Managing Partner of ComCap LLC.
Astound Commerce provides ecommerce and omnichannel solutions to various brands and retailers worldwide. The company offers integration of ecommerce and CMS platforms; mobile and social ecommerce, and digital store solutions; and global commerce solutions. It also provides ecommerce delivery and operation; design, optimization, and marketing; and ecommerce strategy, technology, and project and program management services. Astound Commerce was founded in 2001 and is headquartered in San Bruno, California with offices in London, Munich, Hamburg, Kiev, Dubai, Toronto, and Medellin.
ComCap acted as the exclusive advisor to Astound Commerce.
This transaction reinforces ComCap’s expertise in digital commerce agencies, having successfully closed seven agency transactions and over a dozen professional services transactions in North America, Europe, and Asia. ComCap was more recently featured in FitForCommerce’s latest report, Digital Commerce Services: A Complete Guide to the Systems Integrators and Digital Services Partners, for its expertise in the space.
About ComCap LLC:
ComCap is a premier boutique investment bank focused on the digital retail ecosystem, with key subsectors including B2C ecommerce (including DNVBs, mobile commerce and marketplaces), B2B SaaS, B2B services for retail (IT and marketing services, fulfillment and logistics and call center), and consumer-focused payments. Headquartered in San Francisco, our firm works with mid and large-cap public companies worldwide on buyside initiatives, as well as with public and private growth companies on financing and strategic M&A.
Our typical mandates include M&A and financings for public and private companies. Part of our differentiation is bringing together large global players in the retail ecosystem with unique, disruptive smaller companies that can enable the strategic partner to enter a new geography or experience a material commercial benefit as part of an investment or acquisition. We’ve recently completed transactions or have active projects in the United States, UK, Germany, France, Belgium, Sweden, Japan, India, China, Australia, the ASEAN region and Latin America.
ComCap held its second successful DNVB (digitally native vertical brand) Forum in Los Angeles this week, and we wanted to share key highlights for those that couldn’t attend:
DNVB brands speaking included DSTLD, Winc, Italist.com, and Tipsy Elves. Respective leaders of these companies provided the following insights into their success:
- Provide a clear value proposition and customers will be willing to accept paying for returns.
- Customer surveys during the product development process can drive product success. Launch new products / collections with an SEO mindset from the beginning.
- There is an advantage in basing the business in California near advertising platforms like Snap and Instagram.
- As a marketplace, increasing selection and UX can increase transaction
Capital providers – including Lightspeed, Provenance, H.I.G Growth, and Brentwood Associates – discussed what they look for in DNVB investments:
- Focus on knowing your core customer and how to find more them – don’t try to be all things to all people.
- Stickiness is important in core demographic
- Gross margins of 50%+, which usually means having your own brand.
- LTV calculated as gross margin after fulfillment. Previously investors had looked for a 3x LTV/CAC ratio, now seeking 4x to 5x.
- Being breakeven is important – some investors have a preference for material EBITDA for larger deals, but can accept breakeven for a business with scale and growth even if that would be below their traditional investment threshold.
Outside experts – including General Growth Properties, Union Bank, Moovweb, W Promote, and others provided the following best practices advice to attendees:
- General Growth Properties has used the decline of some malls to re-purpose stores into more productive uses including fitness centers, grocery stores, and other uses. GGP offers consulting services to emerging online brands that are looking to explore physical retail opportunities.
- Union Bank is experienced with working with online and offline retailers at different sizes and with different capital structure needs. From inventory facilities to $10m GMV online companies to comprehensive $100m+ term loans.
- W Promote advises focusing on your best CLV segments. Bid up substantially for most productive customers, bid down 80% for least productive. Focus on Facebook properties given 26% of mobile time spent on these. Leverage 3rd party data (i.e. Epsilon) and don’t use aggregate cost per conversion number.
- Moovweb – largest mobile seller in the US after Amazon and eBay. The mobile consumer is complex, demanding and fickle – one misstep and bounce rates spike. Employ a joint technology and agency approach to rapidly test options – especially related to major sales or holidays.
ComCap LLC Announces Today the hiring of Steve Terry as a Managing Director in its San Francisco office.
Steve has been a technology investment banker for over twenty years. He began his investment banking career with Kidder Peabody’s M&A group in New York and moved to the Bay Area in 1995 to work with Robertson Stephens. He was fortunate to have had the chance to work with industry defining technology businesses in the early stages of their development such as Pixar and E*Trade, and was trained in the importance of positioning businesses such as these for the best possible reception by the capital markets
He has executed hundreds of transactions including: mergers, acquisitions, IPOs, private and public equity and debt issuances, including convertible bonds. He has worked at both large platform, full service investment banks such as Credit Suisse First Boston’s Technology Group led by Frank Quattrone, and smaller boutiques such as Montgomery & Co. Steve also worked at Battery Ventures as a Venture Partner. In that role, he oversaw all capital markets activities throughout the portfolio.
Aron Bohlig, ComCap LLC’s Managing Partner, commented: “We are proud to welcome Steve. With his decades of experience in advising middle market technology businesses and his extensive relationships throughout the technology ecosystem, he is a highly valuable addition to our San Francisco investment banking team. The appointment of Steve underscores our deep commitment to the opportunities we are experiencing throughout the digital retail value chain.”
Steve Terry added: “I am excited to join ComCap LLC’s investment banking team. The firm’s sector focus and the team’s operational backgrounds provide ComCap LLC’s clients a truly differentiated level of insight and service. Having advised countless entrepreneurs throughout my career, I look forward to leveraging my experience, contacts and understanding of the needs unique to middle market technology businesses to contribute aggressively to the continued success of ComCap LLC.”
Steve holds an MBA from the Red McCombs School of Business of the University of Texas at Austin, and a BBA in finance from Texas A&M University.