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Last July, Revolution Growth made a $40 million investment – our largest ever – in Bigcommerce. Why? For three reasons:
1. Internet sales now exceed $250 billion, and growth will continue to be very strong. Indeed, we expect e-commerce to double over the next five years, to $500 billion.
2. After a period of consolidation, with the big getting bigger, we expect e-commerce to begin to fragment, enabling millions of independent merchants to create successful online businesses.
3. We concluded Bigcommerce was well positioned to be the company that empowered these independent merchants to be successful, by providing the tools, marketing resources, and network effects to enable these “little guys” to compete with the “big boys.”
It wasn’t that long ago that e-commerce was widely viewed as an idea that would never catch on. I remember attending industry conferences in the late 1980s and early 1990s where industry “experts” predicted e-commerce would never be successful, largely because most people would never be comfortable entering their credit card information online. Just two decades later, people not only willingly enter their billing information, they now ask merchants to save it so they don’t have to re-enter it later and allow those merchants to track their purchases so they can recommend other products that might be of interest.
We’ve come a long way, baby! Frankly, it is amazing to see how quickly e-commerce has come of age. But the dirty little secret is this first wave of e-commerce has been dominated by a handful of giants — and, up until now, they’ve crowded out many of the independent merchants. Many of the “big box” bricks-and-mortar retail giants have become aggressive players in the e-commerce space. And a few new entrants, notably Amazon, have also emerged as major forces. But the dynamic to date has been the big have gotten bigger while most others have been marginalized.
The giants will continue to grow and be successful, but a big trend over the next decade will be the emergence of a network of independent merchants. We’ve seen this happen in media, as big aggregator brands have given way to upstart independent bloggers. Now we’re on the verge of seeing it happen in e-commerce.
There’s a movement afoot to empower small- and medium-sized businesses — a category that includes mom-and-pop stores, online-only operations, moonlighters and local merchants. They all want to expand their reach. Now, they can.
[blockquote source=”Steve Case”]The bar has been lowered, and now just about anyone can jump over it.
In essence, we’re seeing the democratization of e-commerce.[/blockquote]
Consumers want choices and have niche interests. And the entrepreneurial-minded want to cater to that market. Technology has now reached a point where it’s super easy to setup an online store. Processes that used to be difficult, like transactional capabilities, order fulfillment and personalized customer service functionality, all just work. Online stores that used to take months and hundreds of thousands of dollars to set up can be created in just hours, at a cost of as little as a dollar a day. The bar has been lowered, and now just about anyone can jump over it. In essence, we’re seeing the democratization of e-commerce.
And Bigcommerce is leading the charge. To date, Bigcommerce has facilitated $2.75 billion in online sales. And during the five days from Thanksgiving to Cyber Monday, Bigcommerce clients saw a revenue increase of 113%, dramatically outpacing the 22% growth of overall online spending. Bigcommerce’s success has come from making it super easy for anybody to build an online presence — and from embracing a partnership strategy with innovative apps developers that has resulted in 200 apps (from companies like MailChimp, HubSpot and SumAll) being optimized for the Bigcommerce platform. This robust ecosystem enables even a company of one to compete with large online businesses, and to be up and running in hours, not months.
Revolution’s philosophy has always been to invest in people and ideas that can change the world. We love backing companies that are trying to level the playing field and change the game. And we also love empowering entrepreneurs, to get started and to challenge the incumbents.
Bigcommerce is the embodiment of that philosophy. That’s why it was Revolution’s largest investment to date — and that’s why we’re excited about its prospects, not just to be a successful investment for us, but to empower millions of independent merchants throughout the world to compete and be successful in the rapidly-expanding digital world.
So fasten your seat belts, and get ready for the next wave of e-commerce. Powered by Bigcommerce!
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