The e-commerce enablement startup ecosystem has reportedly experienced a modest contraction in both deal value and count in Q3, “totaling $1.6 billion across 93 deals, decreases of 16.3% and 17.0%, respectively,” according to a recent update from Pitchbook.
Pitchbook noted that both figures “reflect more significant YoY decreases of 68.3% and 40.8%, respectively.”
Despite the recent deceleration, several notable deals have also occurred. Builder, an AI-powered application development platform, “raised $250.0 million in its Series D, reflecting investor interest in AIenabled services.” Thoughtspot, an analytics platform, “raised a $124.0 million Series F to support semantic data analysis and visualization for a variety of industries.”
Tradeshift raised $70.0 million in August to “build source-to-pay software for B2B e-commerce, underscoring their outlook that B2B digitalization and e-commerce adoption are a long-term tailwinds to e-commerce enablement.”
The purchase venue segment led all categories “in funding ($470.3 million), followed by horizontal platforms ($384.9 million) and post-purchase startups ($28.1 million).”
The Pitchbook report also mentioned that subsegment leaders “included storefronts & headless APIs ($320.6 million), and fulfillment & delivery ($269.3 million), and analytics & customer data platforms (CDPs) ($221.8 million).”
The research report added that late-stage deals “accounted for the largest portion of VC investment in Q3 ($767.3 million), edging out venture-growth deals ($483.5 million), which was also the case in Q2.”
The update further revealed that in recent years, capital has “trended toward late-stage startups, and 2023 has extended this trend, accounting for 75.7% of deal value and 52.6% of deal count (78.2% and 43.7%, respectively, in 2022). In 2020, 58.3% of investments went to early-stage, seed, and angel deals.”
According to the report from Pitchbook, this slid slightly in 2021 and 2022 “before contracting more sharply in 2023 (47.4% of deals), indicating investors were seeking the security of mature startups, merchants scrutinizing their software spend, and vendors focusing on profitability and business fundamentals.”
The report pointed out that “geographically, startups in North America have attracted the most capital in 2023 ($2.4 billion), followed by Asia ($1.5 billion) and Europe ($1.2 billion).”