Flow, a company that facilitates and simplifies cross-border e-commerce by brands and retailers and “localizes” the shopping experience for consumers, has completed a $16 million Series A financing round led by Bain Capital Ventures with new investments from Fung Capital and Forerunner Ventures.
Fung Capital focuses on investing in retail technology start-ups such as Olapic, HookLogic, Tulip and Celect, and is the investment arm of the Fung family in Hong Kong.
Forerunner Ventures is an early-stage venture capital firm which counts Birchbox, Bonobos and Warby Parker among its portfolio companies and which invested in Jet.com and Dollar Shave Club.
Previously, Flow revealed Bain’s $13 million contribution to the Series A financing. Bain’s investments have included Rent the Runway, Jet.com, DocuSign, Kiva Systems, LinkedIn, Rapid7, SolarWinds, SurveyMonkey, Taleo and TellApart.
“More than anything else, we wanted the right institutions on our cap table,” said Rob Keve, chief executive officer and cofounder of Flow, along with Mike Bryzek. “The amount they contributed is a function of how strong their interest is. We turned away a lot of interest.”
Generally, retailers and brands don’t get much business on their web sites from customers abroad, but Flow’s mission is to streamline international e-commerce and increase revenues for retailers and brands.
Flow’s cloud-based software solution uses artificial intelligence and virtualization to help alleviate the challenges facing cross-border commerce including addressing multicurrency pricing, providing shipping and international payment options, and spelling out taxes, duties and return procedures so there are no surprises to shoppers.
Flow’s major competition comes from Borderfree, a large, nine-year-old company working with scores of retailers. Borderfree went public in 2014 and was later purchased by Pitney Bowes.
“Our company is entirely software-driven,” Keve told WWD. “It’s built to take costs out and it works for any merchant in any country.”
Clients are charged a subscription fee for the software platform, as opposed to being charged based on revenue sharing.
Flow has yet to disclose any retail clients, but the investment group will be instrumental in making introductions.
According to Keve, Bain is a “very experienced retail tech investor.” Kirsten Green, founder and managing director of Forerunner Ventures, is “a well-respected investor especially in digital brands,” and Fung Capital is “very connected to U.S. retailers being one of their key suppliers in many cases and also has well established trade routes.”
According to the Flow executives, some retail clients will be revealed in the second quarter of this year. The business has been live for over a month and was in the making for about a year and a half.
A good deal of the money from the financing is being earmarked for sales and marketing efforts and “getting our name out there,” Keve said. In addition, “We will be building out a world-class engineering team,” Bryzek said.
According to Forerunner’s Green, Flow has a “powerful” platform to ease the process of global e-commerce which “has largely remained cumbersome and intimidating for both merchants and consumers.” Forerunner chose to invest in Flow because of the importance of cross border e-commerce which is largely untapped by retailers; the strength of the Flow team, and the “elegance” of the Flow program “in its relative ease of integration.”
“By removing the challenges typically associated with international e-commerce, Flow is well-positioned to be an industry game changer and reshape global commerce,” added John Seung, managing partner at Fung Capital.
In addition to Bain, Fung and Forerunner, Flow previously secured funding from Brian Lee of The Honest Co.; Alexandra Wilkis Wilson of Gilt and Glamsquad; Alexis Maybank of Gilt and Project September; Shan-Lyn Ma of Zola, and David Tisch of Spring.
The investors have “a track-record of building powerful new disruptive technologies and brands in the retail space,” Keve said.