Welcome to Startup of the Week, a new column on Thinknum Media where we’ll be highlighting startups we think are doing interesting things, have a compelling story, or are noteworthy but slipping under the radar for whatever reason.
Say you’re a mom and pop shop struggling during the pandemic, previously relying on in-store business to survive. How do you bring your business online? Sites like Amazon charge significant fees for sales on their site, not to mention the anti-competitive practices it’s been accused of using against smaller businesses on their platform. And how on earth will you retain customers when so many businesses have their own storefronts and you don’t have the money to spend on advertising, newsletters and the like?
That’s where our inaugural Startup of the Week, Privy ($PRIVY) comes in. Privy offers a subscription to a service that gives vendors tools to capture more customers via banners, email capture tools, in-store pop-up ads, and more. Put simply: it aims to make your customers sticky. Privy tries to be the difference between a customer leaving the site with a full cart and them hitting the purchase button.
Privy claims to be used by over 400,000 online stores, and co-founder Ben Jabbawy recently announced the company has helped its various clients drive over $4 billion in sales.
We've accomplished a lot as a small team since 2015.— Ben Jabbawy (@jabbawy) July 23, 2020
Soon $10M ARR.
But we're building to help ecom entrepreneurs grow.
Today we crossed a HUGE milestone. We've now helped stores drive over $4B in sales using @Privy.
That's what really matters. pic.twitter.com/FYXSWRb1se
What’s so fascinating about Privy is not just how many businesses it’s partnered with and how many sales it’s driven, but how it fits into the larger trend of ecommerce. There’s no shortage of coverage of Shopify ($NYSE:SHOP), the ecommerce company whose share price has increased 151% since January. While Shopify, which allows businesses to open up their own digital storefronts, is certainly the most notable success story in ecommerce, companies like Privy shouldn’t go ignored.
COVID-19 has accelerated the retail apocalypse, increased the amount of online shoppers, and shown that direct-to-consumer businesses are built to outlast the pandemic. All this means there is just too much growth in the ecommerce space for one company to possibly gobble up. In 12 weeks, the industry has grown to where experts thought it would take another 5 years to reach.
This chart gets me every time: Internet shopping has grown more in the past 12 weeks than it did during the last decade pic.twitter.com/B3HiiYs51b— Matt McGowan (@matt_mcgowan) July 25, 2020
What’s important to understand is that Privy doesn’t view itself as a competitor to ecommerce businesses like Shopify, but as an augment - there’s a tab right there on its homepage that says “For Shopify Users,” after all. The idea is that Privy helps you get the most out of your digital storefront by making sure your shoppers complete purchases, get regular reminders about your products, and return often. The success of businesses like Shopify and Privy mean that, for what feels like the first time in a long time, small businesses have the tools to go direct-to-consumer and have the tools to survive in the digital marketplace without having to default to Amazon or other distribution platforms.
And it accomplished all this while staying a relatively small team. In just a year and a half, its Linkedin headcount shows it’s added some 32 new employees, a 69.5% increase. That number is likely to keep growing as more and more businesses leave big platforms and move independent via Shopify. Privy’s size and rate of growth could make it an acquisition target for other, bigger ecommerce companies looking to allow clients the ability to both open a storefront and market it in one package.
Ultimately, Privy’s relationship with ecommerce and DTC businesses is symbiotic; If they’re succeeding, Privy is succeeding. And boy, are they succeeding.