Prive has raised $1.7 million to build a more configurable e-commerce subscription platform
Prive, a months-old, San Francisco-based startup founded by two former Uber product managers, just raised $1.7 million in pre-seed funding to create what it describes as a far more customizable e-commerce subscriptions platform for D2C brands.
The round was co-led by Patrick Chung and Brandon Farwell at XFund and Ben Ling from Bling Capital, with participation from Defy Partners, Halogen Ventures and Uber executives.
Founded by Claudia Laurie and Alex Craciun - who both spent two-and-a-half years at Uber and decided, based on their learnings about pricing and incentives, to leave the company earlier this year - Prive aims to better enable small retailers to compete with behemoths like Amazon.
The broad idea is that by plugging into existing APIs from Shopify and other e-commerce platforms, Prive can form an opinion that it sells to merchants about what customers tend to buy on a recurrent basis. Maybe it sees that people who buy razors also tend to buy toothbrushes on a similar cadence, for example. It passes that information along, then helps the brand create more customized, and flexible, offerings so that their shoppers are presented with items they might want, as well as can more easily cancel items that are starting to pile up.
The market opportunity is huge, and the existing [e-commerce subscription] tools are just scratching the surface," notes Laurie. Indeed, according to the group eMarketer, subscription e-commerce sales have grown 41% from the start of the coronavirus pandemic, and it foresees that 3% of U.S. retail e-commerce sales will come from subscriptions this year, totaling $27.67 billion. That's up from $10 billion in just two years.
Of course, a lot has yet to be built, which is where the pre-seed funding comes in. Right now, Prive is a seven-person team with some serious competition, namely from Recharge, a seven-year-old, Santa Monica, California-based subscription e-commerce company that in May raised $277 million in growth capital at a post-money valuation of $2.1 billion. As of that announcement, Recharge had roughly 330 employees and was fueling the subscription service for what it said was 15,000 merchants and 20 million subscribers worldwide.
Other rivals include nine-year-old Bold Commerce (it has raised $44 million altogether), and 10-year-old Chargebee, which has raised around $220 million over the years, according to Crunchbase data.
E-commerce subscription' is an incredibly hot buzzword," Craciun acknowledges. But he also thinks today's current product offerings are just scratching the service.
Clearly, investors are willing to gamble that he's right, and that Prive could be a team that proves it.
Current tools can create more headaches than they actually solve," says Craciun. There is a lot of rigidity in today's subscriptions that makes it very difficult to identify the right recurring mix of offerings. We're here to break down that mental model."