pattern, a Lehi, Utah-based e-commerce accelerator that helps brands optimize sales on marketplaces like Amazon, Walmart, Target, eBay and Google, received $225 million in 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 investment brings the company's total valuation to $2 billion and serves as the "largest raise ever for a local, women-founded or co-founded company in Utah." The company has raised more than $275 million to date, including a round Serie A of 52 million dollars in August 2020.
Founded in 2013 by Melanie Alder and Wright, the company expects to top $6 billion in revenue over the next year. Its mission is to help brands gain a share of the $XNUMX trillion global e-commerce market with a major push across Asia and paid offerings like buy now, pay later (BNPL extension), Wright said.
Unlike e-commerce aggregators, who buy smaller brands they sell on marketplaces and use technology to run and scale them more efficiently, the pattern works with brands for free to accelerate sales by buying brand inventory and finding out where sales gaps are, optimizing it across markets and identifying business gaps through market insights to increase margins.
Wright referred to last year as "the year of the e-commerce aggregator," with companies like thrasio, Berlin Brands, Perch and others that operate in a hypercompetitive market. These companies together have raised billions of dollars in equity and debt funding in 2021 alone.
However, he says that with the way e-commerce accelerators are growing, such as pattern, packable, spreetail y netrush, growing in investments of almost 600 million dollars so far in 2021, next year “will be the year of e-commerce accelerators”.
“Our theory is that pattern and others will succeed because we are figuring out how to grow brands and execute them instead of spending time acquiring and adding EBITDA,” added Wright. “These stories haven't played out yet, but it's the concept of accelerators versus aggregators. They're basically buying brands, but in a year or two they'll be wondering what to do with them. Aggregators will have to become accelerators or I don't think they will survive."
pattern now it has more than 900 employees and works with more than 100 brands around the world.
John Bailey, managing partner of knox lane, a San Francisco-based company focused on technology and consumer services, said it was more comfortable with the accelerator model having previously led ELF Cosmetics through its public investment offer.
He says that accelerators are "fighting the hardest battle" working to build companies. As a result of his work, pattern it's getting net revenue retention figures that "compete with some of the best-in-class SaaS providers," he added.
“Brands are associated with pattern to navigate the market environment,” said Bailey. “The vision of the supply of pattern it's different than other platforms, and what's most compelling is their global execution and how they think about e-commerce globally. China has many advantages in the total addressable market, but the fact that pattern have an advantage in this aspect in the United States, as well as profitable growth and scale, it was compelling for us.”
