Only seven months since its most recent funding announcement, Yotpo announced that it’s raised another $230 million in a Series F round that values the company at $1.4 billion (post-money).
Yotpo is a user-generated content marketing platform. The company’s enterprise technology and integrated solution allows marketers to gather, curate, manage, and respond to all types of user content from one platform.
New York-based Yotpo is able to leverage content throughout the buyer’s workflow which increases brand awareness and sales.
The 10-year-old start-up offers its e-commerce marketing platform to help brands accelerate direct-to-consumer growth. The company’s platform lets its customers post reviews and ratings, showcase customers’ Instagram photos, and develop loyalty programs.
The Future of E-Commerce According to Yotpo
“Our round, in my eyes, it’s all about celebrating the future of e-commerce,” co-founder and CEO Tomer Tagrin told me. “Brands don’t need to worry about connecting the marketing stack anymore.”
While success in traditional retail has been determined by “location, location, location,” Tagrin said e-commerce is “all about consumer attention.”
To capture that attention, Tagrin said that the average brand is using 10 to 14 different marketing applications, creating a “pretty horrible experience.”
As a result, Yotpo looks to offer all of a brand’s e-commerce marketing needs in a single, integrated platform. Tagrin described to Techcrunch a marketer who’d like to create a customized offer just for users who had both bought a product in the past 90 days and left a five-star review. Yotpo lets them to do that with “just the click of a button,” whereas “that experience was just not feasible before Yotpo,” the CEO explained.
Four Main Yotpo Products
The start-up’s platform currently entails four main products — Yotpo SMS Marketing, Yotpo Loyalty & Referrals, Yotpo Reviews and Yotpo Visual UGC — which integrate with each other, as well as with e-commerce platforms like Shopify, Salesforce Commerce Cloud, Adobe-owned Magento, and BigCommerce.
Tagrin said Yotpo still had money remaining from the last round. But it opted to raise additional capital to keep investing in product and marketing, as well for strategic acquisitions.
Yotpo acquired SMSBump last year for $356 million. Tagrin commented to TechCrunch that the company is “70% of the way there” toward full integration. In addition, the company is planning to launch new products around customer communication and measuring a customer’s lifetime value.
Yotpo has now exceeded $100 million in annual recurring revenue. The SMS marketing product grew revenue by 170% last year. It’s loyalty product saw its revenue nearly double.
Big brands like Patagonia and Steve Madden use the platform, but CEO Tagrin stressed that it’s also used by newer direct-to-consumer businesses like Princess Polly and has 30,000 paying customers overall.
“I like to say that Victoria’s Secret will die by a thousand cuts,” he said. “These are the mini-brands … the up-and-comer brands that are going to replace the incumbents.”
Yotpo has now raised more than $400 million in total funding, according to Crunchbase. The round was led by Bessemer Venture Partners and Tiger Global. Also joining in were Claltech Investment, Coin Ventures, Hanaco, Vertex Ventures, Vintage Investment Partners, and investors.
“Tiger Global has long been bullish on eCommerce as the future of retail, having invested in disruptor brands like Warby Parker and Peloton, giants like JD.com, and best-in-class SaaS companies like Stripe and Twilio,” said Tiger’s John Curtius in a statement. “We are excited by Yotpo’s approach to provide a unified marketing tech stack and the value it provides to brands and online shoppers in the process.”