Prive, a San Francisco-based startup that has been around for months, was founded by two former Uber product managers. It just raised $1.7 Million in preseed funding to help create what Prive describes as an e-commerce subscriptions platform that is far more customizable for D2C brands.
Patrick Chung and Brandon Farwell, both at XFund, and Ben Ling, from Bling Capital, co-led the round. Participants included Defy Partners and Halogen Ventures, as well as Uber executives.
Prive was founded by Alex Craciun and Claudia Laurie, who spent nearly two-and-a half years at Uber. Based on their experiences with pricing and incentives, Prive decided to leave the company earlier in the year. Prive's goal is to help small retailers compete with giants like Amazon.
Prive is able to plug into Shopify's APIs and other ecommerce platforms to form an opinion about customers that it can sell to merchants. Perhaps it notices that razor-buyers also buy toothbrushes in a similar manner. The brand then uses that information to create more personalized and flexible offerings that allow their customers to choose the items they want. They can also cancel any items that have started to accumulate.
Laurie notes that the market is vast and existing [ecommerce subscription] tools only scratch the surface. According to eMarketer, subscription ecommerce sales have increased 41% since the outbreak of the coronavirus pandemic. It predicts that 3% U.S. retail ecommerce sales will be from subscriptions in 2018, totaling $27.67 million. This is an increase of $10 billion in two years.
There is still much to be done, and that's where pre-seed financing comes in. Prive, currently a seven-person team, faces serious competition from Recharge, a Santa Monica-based subscription ecommerce company with seven years of experience that raised $277 million in growth capital in May at a post-money value of $2.1 billion. Recharge, which had approximately 330 employees at the time of this announcement, was providing subscription services for 15,000 merchants worldwide and 20 million subscribers.
Bold Commerce, a nine-year-old company, has raised $44 Million, and Chargebee (10 years old), which has raised approximately $220,000,000 over the years according to Crunchbase data.
Craciun admits that e-commerce subscription is a hot buzzword. Craciun also believes that the current product offerings only scratch the surface of e-commerce subscription.
Investors are willing to take a chance that he is right. Prive could be an example of this.
Craciun says that current tools can cause more problems than they solve. It is difficult to find the right mix of subscriptions because of the rigidity of today's subscriptions. We are here to help you break down this mental model.