Pattern, a Lehi, Utah-based e-commerce accelerator that helps brands optimize sales on marketplaces like Amazon, Walmart, Target, eBay and Google, brought in $225 million in growth funding to continue developing its technology and expand its global presence.
The new round was led by Knox Lane. Pattern co-founder and CEO David Wright said this round brings the company’s total pre-money valuation to $2 billion and serves as the “largest raise by a home-grown, female founded or co-founded company in Utah.” The company has raised over $275 million to date, including a $52 million Series A announced in August 2020.
Founded in 2013 by Melanie Alder and Wright, the company expects to surpass $1 billion in revenue within the next year. Its mission is to help brands get a piece of the $6 trillion global e-commerce market that is being driven by Asia and payment offerings like buy now, pay later, Wright said.
Unlike e-commerce aggregators, which buy up smaller brands that sell on marketplaces and use technology to run and scale them more efficiently, Pattern’s platform works with brands for free to accelerate sales by buying the brand’s inventory, figuring out where the gaps are in sales, optimizing it across the marketplaces and identifying insights for boosting margins.
Wright referred to the past year as “the year of the e-commerce aggregator,” with companies, like Thrasio, Berlin Brands, Perch and others, operating in a hyper competitive market. These companies together have raised billions of dollars in equity and debt funding in 2021 alone.
However, he says with the way e-commerce accelerators, like Pattern, Packable, Spreetail and Netrush are growing, which includes raising nearly $600 million so far in 2021, next year “will be the year of the e-commerce accelerators.”
“Our theory is that Pattern and others will win the day because we are figuring out how to grow brands and execute rather than spending time acquiring and aggregating EBITDA,” Wright added. “These stories have not played out yet, but it is the concept of accelerators versus aggregators. They are essentially buying brands, but in a year or two, will be wondering what to do with them. Aggregators will have to become accelerators or I don’t think they will survive.”
Pattern now has more than 900 employees and is working with over 100 brands globally.
John Bailey, managing partner Knox Lane, a San Francisco-based firm focused on consumer and tech-enabled services, said he was on the accelerator side having previously led e.l.f. Beauty through its IPO.
He says that accelerators are “fighting the harder battle” by working to build up companies. As a result of its work, Pattern is seeing net revenue retention figures that “rival some of the best-in-class SaaS providers,” he added.
“Brands partner with Pattern to navigate the marketplace environment,” Bailey said. “The vision of Pattern’s offering is different from other platforms, and what is most compelling is their global execution and how they think of e-commerce globally. China is many multiples ahead on the total addressable market, but the fact that Pattern has a head start on this in the U.S., as well as profitable growth and scale was compelling to us.”
Source Link Pattern bags $225M; CEO says e-commerce accelerators ‘will win the day’ over aggregators
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