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Why Brands, Retailers and Investors Should be Looking at Israeli E-Commerce

Two side-by-side acquisitions in the US in recent months — Xaxis’ purchase of Triad Retail Media, for a rumored $300m, and Criteo’s $250m buyout of close competitor HookLogic — point towards a clear trend in global e-commerce, with considerable lessons for entrepreneurs in Israel. Both Triad and HookLogic help retailers sell ad space on their websites, opening up a […]

The post Why Brands, Retailers and Investors Should be Looking at Israeli E-Commerce appeared first on iAngels.

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Two side-by-side acquisitions in the US in recent months — Xaxis’ purchase of Triad Retail Media, for a rumored $300m, and Criteo’s $250m buyout of close competitor HookLogic — point towards a clear trend in global e-commerce, with considerable lessons for entrepreneurs in Israel.

Both Triad and HookLogic help retailers sell ad space on their websites, opening up a valuable additional revenue stream for sellers, especially those transitioning from physical stores towards e-commerce.

Triad’s flagship client — Walmart — made a similar move in 2016, buying upstart online retailer Jet.com for $3.3 billion, ostensibly to get its hands on Jet co-founder Marc Lore. In essence, after years of stagnant e-commerce performance, Lore became Walmart’s now-or-never effort to challenge Amazon’s total dominance of online retail.

Analyzed together, the Triad, HookLogic and Jet deals offer a telling case study for investors also, highlighting the huge investment today in “catch-up” e-commerce. Macy’s displayed similar thinking in August, in announcing the closure of 100 stores in favor of investment in online and mobile. Sears has made parallel moves for several years, as have major retail brands far beyond the US.

New technology needed to capture changing buying patterns

The trend is clear. As iconic legacy retailers seek to adapt their operations for the changing retail preferences of consumers — and younger, urban consumers in particular — deep investment in both R&D and human capital is needed.

Ahead of the game as ever, the giants of e-commerce have already spotted the value brought by Israeli startups in this space. Through investments or acquisitions respectively in Annapurna Labs (Amazon), Corrigon, SalesPredict, Shopping.com, and The Gifts Project (eBay) and Twiggle and Visualead (Alibaba), each of those majors established a base in Israel, and continues to look closely at Israeli innovation. For that reason, exit strategies built on an acquisition by one of these giants remain a valid hope for early-stage investors.

However, the savvy investor today should be looking elsewhere also. Much like Walmart, across the globe there are huge legacy retailers fighting to adapt to modern, digitized consumer habits. Many of these brands have an aging consumer base, and minimal in-house tech capabilities. The choice facing these companies is both simple and urgent. Either they continue to swim against the tide of e-commerce, and unsuccessfully battle the Amazon juggernaut from a bricks-and-mortar setup, or they rapidly invest in easy-to-implement technology, in the hope of fighting strong in a digital age.

The same need for innovation spotted by Walmart exists higher up the value chain also, opening up a whole new category of exit strategy for forward thinking e-commerce solutions. Unilever’s billion-dollar acquisition of Dollar Shave Club in July, cutting retail suppliers out of the value chain entirely, gives an unmissable hint as to where the powerful conglomerate believes the future of retail lies.

E-Commerce in Israel — an overview

In Israel, while e-commerce continually struggles to take off on the ground, a string of local startups are aiming to add their names to the success stories listed above. Across multiple sub-segments of e-commerce — marketing, payments, supply chain management, data collection, analytics, advertising and more — investors have been backing Israeli companies in this space. In 2015 alone, Israel’s e-commerce sector saw $230m in investments, yielding $484m in exits (following $493m in exits in 2014).

Zeekit, which recently announced its $9m Series A, offers a virtual fitting room app, where users can see themselves in the clothing purchases they’re considering. MySizeID tackles a similar problem from a different route, by calculating a users’ precise measurements, to eliminate the perennial sizing issues that plague the online clothing industry. Brayola, which raised a $2.5 million Series A earlier this year, tackles a similar problem, allowing women to evaluate and validate their bra choices.

Additional promising names include Hexa, which lets retailers recreate dull 2D sales images as flexible 3D objects, and E-Global, which raised $20 million this year for its solution to enable retailers to sell more effectively to overseas markets.

Other names to look out for include Wiser (a dynamic price-matching engine), Shoppimon (a platform automation tool), Commerce Sciences (customization and micro-targeting solutions), Feedvisor (algorithmic repricing and revenue intelligence) and Aspectiva (a tool to curate and productize consumer reviews).

Finally, as is often the case, Israel’s e-commerce sector draws heavily on the deep tech capabilities honed within the military. To use a standout example, it’s far from coincidence that Israel, for thirty years the world’s largest exporter of military drones, is also home to more than thirty civilian drone companies, several of which are explicitly targeting the smart delivery of urban e-commerce goods.

The opportunity today (and what we look for)

Against this backdrop, e-commerce entrepreneurs should have a clear sense of the opportunity that awaits. Whether for acquisition-hungry e-retailers like Amazon or eBay, or investing-to-adapt legacy brands like Walmart, or even a giant like Unilever that’s playing with the transition from B2B to B2C, innovation will ultimately determine how each of them fares.

As the retail industry in general adapts to the changing way in which goods are purchased globally, exit strategies for companies active in this space are widening. While high-street retailers and corporate conglomerates were once off-piste options for e-commerce entrepreneurs, the lesson of 2016 so far is that they no longer should be. If an entrepreneur spots this, and starts targeting these strategic relationships and links early-on, that’s a tell-all sign of a company that’s headed in the right direction.

From the hundreds of companies we’ve assessed, we’ve spotted this on several occasions, backing four companies to date:

· Kwik, which offers branded smart buttons that connect retailers, brands and service providers to their customers

· Caja Systems, a robotic warehousing solution for the smart storage and distribution of goods

· WebyClip, which automatically matches and embeds video clips to strengthen e-commerce sales pages

· Zooz, a data-driven payments platform designed to help sellers customize and optimize their global payment costs

The shared thesis across the four investments, and our clear investment preference within e-commerce, is for ancillary technologies — specifically those driven by proprietary software — that retailers can quickly integrate in order to demonstrably improve some of aspect of their performance. In our assessment, investments that meet this criteria not only correspond with Israeli strengths, but typically command solid valuations — upwards of 3x in EV/Revenue.

According to August 2016 figures from research group eMarketer, the share of e-commerce as a percentage of total retail globally is set to almost double in the years ahead, from 7.4% in 2015 to a projected 14.6% by 2020. Looking to that target point and beyond, investors can expect to see further prominence for Israeli companies, provided they continue to develop the technical solutions needed to power this huge global change in consumer behavior.

This article was originally published on iangels.vc

Source: https://www.iangels.com/2016/11/brands-retailers-investors-looking-israeli-e-commerce/

Private Equity

20VC: Sequoia’s Roelof Botha on His Biggest Lessons Working Alongside Don Valentine, Mike Moritz and Doug Leone, Leading Sequoia’s US Business and What Sequoia Do To Retain Their Edge at the Top & The Crucible Moments That Define Startup Success

Roleof Botha is a Partner @ Sequoia Capital, one of the world’s leading venture firms with a portfolio including the likes of Airbnb, Instacart, Stripe, UiPath, Zoom, the list goes on. As for Roelof, at Sequoia he has led rounds into the likes of YouTube, Instagram, Eventbrite, Square, MongoDB, 23andMe and Unity Technologies to name a few. Before joining the

The post 20VC: Sequoia’s Roelof Botha on His Biggest Lessons Working Alongside Don Valentine, Mike Moritz and Doug Leone, Leading Sequoia’s US Business and What Sequoia Do To Retain Their Edge at the Top & The Crucible Moments That Define Startup Success appeared first on The Twenty Minute VC.

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Roleof Botha is a Partner @ Sequoia Capital, one of the world’s leading venture firms with a portfolio including the likes of Airbnb, Instacart, Stripe, UiPath, Zoom, the list goes on. As for Roelof, at Sequoia he has led rounds into the likes of YouTube, Instagram, Eventbrite, Square, MongoDB, 23andMe and Unity Technologies to name a few. Before joining the world of venture, Roelof was the CFO @ Paypal playing a key role in their hyper-growth from 2000-2003.

CLICK TO LISTEN ON ITUNES

In Today’s Episode You Will Learn:

1.) How did Roelof go from actuary in South Africa to CFO @ Paypal? What were his biggest lessons from seeing Paypal burn $10M per month? How did Paypal lead to his joining Sequoia as a Partner?

2.) Market Evaluation: Does Roelof agree that the market is crazy today? How does today compare to prior vintages? How does Roelof assess the compression of fundraising timelines? With compressed timelines, how does he build relationships of trust with founders?

3.) Founder Evaluation: What were Roelof’s lessons on founder assessment from Don Valentine? What matrix did Don teach Roelof to assess founders on? How does Roelof feel about the rise of competitive rounds? When should founders take them vs remain heads down on execution?

4.) Investment Mentality: How did Roelof prevent becoming too confident when early investments went well? How does Roelof prevent relying on past failures as a reason for turning down opportunities today? What can investors do to retain a very flexible mind? Why does Roelof believe you are only as good as your next investment?

5.) Sequoia’s Edge: How does Roloef think about what it takes for Sequoia to retain it’s edge at the top? How does Roloef measure the success of the Sequoia scout program? How did they structure it? How has the structure changed? What do they plan to do moving forward?

6.) Board Membership: How would Roloef evaluate his current style of board membership? How has that style changed over time? What elements did he find challenging? What advice would Roelof give to new board members adopting their first board seats?

Items Mentioned In Today’s Show:

Roelof’s Favourite Book: Man’s Search For Meaning

Roelof’s Most Recent Investment: mmhmm

As always you can follow Harry and The Twenty Minute VC on Twitter here!

Likewise, you can follow Harry on Instagram here for mojito madness and all things 20VC.

Source: https://thetwentyminutevc.com/roelofbotha/

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Private Equity

Private equity investor Centerbridge Partners backs Syncapay’s acquisition of Wirecard North America

From: FinTech Global Syncapay has announced that it has bought Wirecard North America, marking another page in the story of the collapse of the scandal-ridden former FinTech giant. Wirecard imploded this summer after a suspected multi-billion dollar fraud was unearthed. Since then the company, which was once hailed as one of Germany’s biggest FinTech success […]

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From: FinTech Global
Syncapay has announced that it has bought Wirecard North America, marking another page in the story

Source: https://www.altassets.net/private-equity-news/by-news-type/deal-news/private-equity-investor-centerbridge-partners-backs-syncapays-acquisition-of-wirecard-north-america.html

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Private Equity

Gulf Capital backs CWB as part of $60mln IP platform build

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The post Gulf Capital backs CWB as part of mln IP platform build first appeared on https://africacapitaldigest.com.

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