Today, Next Coast Ventures is proud to announce that we have led the Series A round in Austin-based 101 Commerce, a multi-brand ecommerce platform targeting the ‘Fulfillment by Amazon’ (FBA) marketplace. We founded Next Coast on the premise that we believe in outstanding entrepreneurs with business ideas that will disrupt large marketplaces, and 101 Commerce is a true testament to that mission.
Richard Jalichandra, Founder and CEO of 101 Commerce, saw the rapid growth of Amazon FBA businesses and realized there was even more upside to be captured in the marketplace. Richard has an incredibly strong record as an entrepreneur. Formerly the CEO of BodyBuilding.com, iSocket, MapMyFitness, and Technorati, there is not a better entrepreneur to tackle this new, growing marketplace by working with brands to grow their businesses.
The other members of the founding team are in the same league: genuine badasses with very specific domain expertise. Caith Chapman, Chief Marketing Officer and Head of M&A, has over 15 years of experience in the consumer internet space, including product management for Tastemade, MapMyFitness and Demand Media. Chris Duty, VP of Product Management and Operations, has been hands-on with consumer mobile apps for years during his time as head of product at Student.com and RetailMeNot, and lastly helped run an FBA business that sold for seven figures. Mike Farrar, CFO, has worked with Richard three times, where they ran multiple fast-growing operations and executed many M&A transactions and financings together. We always say an investment for us is not just about believing in the business idea, it’s about believing in the founding team, and Richard, Caith, Chris and Mike’s strong track records are a perfect example of why.
We also talk about our Company Building strategy when we discuss new investments, and this is an investment that we’ll get to frequently deploy this strategy. This is a play we know well. Our Co-Founder Thomas Ball was part of the team that were the first and lead investors in RetailMeNot and Jam City, which both ran a similar strategy in their respective industries. Also during his time at Austin Ventures, that firm was also the first investor in HomeAway, another very similar play in the vacation rentals space. 101’s strategy is something we understand both in its beginning stages and the road bumps it can hit over its lifetime, and we’ll be there with our sleeves rolled up working with Richard and his team along the way. The 101 team has even been working from our offices for the past few months, giving us the opportunity to get hands-on with our Company Building efforts as they grow.
But we’re not the only ones that know this play well, our co-investors understand this strategy firsthand and will be invaluable additions to advising 101 along their journey. Brian Sharples, Founder and former CEO of Homeaway, Cotter Cunningham, Founder and CEO of RetailMeNot, and Shawn Colo of 3L Capital (co-founder of Demand Media) have joined this Series A round as well. We’ve known these investors for over a decade and believe nobody has a stronger understanding of starting this type of business in Austin than this group.
So what exactly does 101 Commerce do?
Targeting small and midsize businesses that use FBA, 101 is going to create additional operating leverage by providing technology, supply-chain economies of scale, and big data marketing and analytics – traditionally challenges for niche, ecommerce brands. The beauty of FBA is it allows these small and midsize businesses to outsource the biggest challenges ecommerce companies face: consumer traffic, efficient conversion, online checkout and fulfillment. They also get to enjoy the benefits of being an Amazon Prime offering. Essentially, 101 is going to take the benefits of outsourcing via FBA even further by investing in these private-label brands and leveraging their own expertise and technology to grow their businesses.
True to our founding mantra, this is a big market. In 2017, the number of FBA businesses doing more than $100,000 in sales was 140,000, up from 70,000 in 2015. Last year more than 20,000 FBA businesses did over $1 million in sales. Today, over half of Amazon’s package volume is now coming from marketplace sellers.
So we have a top-notch founding team with a strong track record, a business strategy we understand well, a great group of co-investors and a huge marketplace ripe for disruption. And it gets better, the timing of an idea like this is perfect in our eyes. Two of the market trends we think have huge potential right now are the death of the old way of retail and marketplaces making business models far more efficient. 101 Commerce hits squarely on both of these trends, capitalizing on the digital renaissance connecting buyers and sellers in ways we couldn’t even understand a decade ago.
As we continue to deploy our hands-on Company Building strategy and working with 101 Commerce as they begin their partnerships with growing brands, we are very excited to finally announce that they have joined our growing portfolio. We are proud to have been selected to partner with Richard and the 101 team for the next phase of their journey and look forward to many more exciting updates ahead.