👟 Backing Stockly
Overlooked #124
Hi, it’s Alexandre from Eurazeo (ex. Idinvest). I’m investing in seed & series A consumer and consumer enablers startups all over Europe. Overlooked is a weekly newsletter about venture capital and underrated consumer trends. Today, we’re thrilled to announce that we’re co-leading a €12m series A into Stockly which is building a decentralised network of e-commerce inventory.
Today, Stockly is raising a €12m series A co-led by Eurazeo and Daphni with the participation of several business angels including Checkout’s CEO and founder Guillaume Pousaz and Galeries Lafayette Group’s owners family office called Motier Ventures.
Eurazeo led Stockly’s €5.1m Seed round announced back in March 2021. We’ve been working with Eliott, Oscar and the Stockly’s team for almost two years. We have always been impressed by their execution speed and quality. Even though Eliott and Oscar are first time founders, they are building Stockly as if they were repeat entrepreneurs with a strong emphasis on company culture (people + processes) and on long-term success. As a result, we’re delighted to reiterate our financial commitment to the company.
Stockly is creating a new category in e-commerce. It builds a decentralised network of shared inventory to help brands, merchants and marketplaces to automatically buy or sell inventory to other network’s participants.
Stockly can be described as the Plaid for the e-commerce market. It integrates via API with e-commerce stakeholders to enable information transfers and transactions between them. In the long term, Stockly has the potential to claim a percentage of the total e-commerce market.
At the moment, Stockly is focused on solving the ecommerce out-of-stock's pain point for merchants and marketplaces (e.g. GoSport, Decathlon or Galeries Lafayette). Today, up to 30% of visitors abandon their cart because of out-of-stocks and these purchase intentions represent a €20bn annual virtual loss for merchants.
For a consumer, it's a disappointing experience when you don't find the item or the size of the item that you are looking for. You may go on other websites and if you are satisfied with their customer experience, you will never order again from the initial merchant that did not have the item that you were looking for.
For a merchant, losing a customer on a out of stock's issue is tough because he may definitely churn from your website, you are not amortizing your customer acquisition costs and you may loose a cart with several items beyond the item that you don't have in your inventory.
Stockly’s technology enables e-commerce websites to offer a product even when it’s out of stock, by having the product shipped by the brand or another retailer in Stockly's distribution network. How does it work?
Step 1: Let's say that as a consumer, I'm looking for my next pair of sneakers on a e-commerce website. The e-commerce website does not have my size in its inventory. Instead of displaying an out of stock label, the merchant can say it has the item and that it will be delivered by Stockly. As a consumer, I don't see that the item is out of stock in the merchant's inventory and I can buy it seamlessly.
Step 2: Behind the scenes, the merchant will transfer through API the order to Stockly which will attribute it to the best supplier. The best supplier is picked based on a list of criteria defined by both the merchant and Stockly (price, distance, level of supplier integration etc.) The price paid by the consumer is divided between the merchant, the supplier and Stockly.
Step 3: The supplier ships the pair of sneaker to the end customer through a white label parcel. As a customer, I can track the order through Stockly. When I receive the order, I'm an happy customer that will keep ordering items through the merchant even if it did not have the item that I was looking for in its own inventory.
Besides stockouts, it’s interesting to think about other potential use cases that can be powered by Stockly’s network:
In the future, you can imagine demanders using Stockly to add new products to their marketplace without needing to have the stock behind. It could be a super efficient way to test a new product or a new category before purchasing inventories. It could also be a great way to integrate adjacent products to your core category when you are a merchant (e.g. adding kettles and thermos from third party vendors if you are a D2C brand selling tea).
Another use case I'm super excited about is to use Stockly as a way to transform any website into an e-commerce shop. For instance, imagine you are a famous Twitch gaming streamer. You could use Stockly to start selling on your website the hardware you use to play games or stream on Twitch
Stockly will use the funding to grow its team to 50 employees and to expand its network of brands, merchants and marketplaces. If you want to get in touch with Stockly to either join the team or become part of the network, you can send me an email at adewez@eurazeo.com.
Thanks to Julia for the feedback! (🦒) Thanks for reading! See you next week for another issue! 👋