Investments into the e-commerce enablement ecosystem contracted in Q1, producing $1.7 billion across 83 deals, marking decreases of 52.2% and 26.5%, respectively, relative to Q4 seasonal increases. This, according to a report from PitchBook.
PitchBook further noted that Q1 2024 approached parity “with Q3 2023, underscoring that the category is approaching a steady state of investment activity after the COVID-19 pandemic.”
YoY, deal value decreased 5.3%, “while deal count faced greater downward pressure, falling more than 30%,” the PitchBook report revealed.
While COVID-19 lockdowns produced a perfect storm of low interest rates, consumer savings elevated “by stimulus checks, and few options other than online shopping, these conditions are now in the rearview mirror,” the PitchBook report added.
PitchBook also mentioned that shoppers now “face persistent inflation and elevated costs of living.”
While new shopping mediums are emerging, closely “coupled with video games and television, traditional retail and marketplace models continue to perform well.”
The postpurchase segment (totaling $701.3 million across 20 deals) and purchase venue segment (earning $479.7 million over 16 deals) landed “the greatest capital allocations.”
Leading subsegments throughout the category included livestream & social commerce ($235.2 million), e-commerce as a service ($156.1 million), and storefronts & headless APIs ($143.4 million).
International digital commerce growth “spurred several deals in Q1. ADDI, a Bogotá-based BNPL and shopping platform, raised $86.0 million.”
The PitchBook report pointed out that Q4 2023 also produced multiple deals “for global BNPL providers like Tabby ($950.0 million Series D) and Tamara ($340.0 million) alongside strong utilization rates during the year-end holiday season in 2023.”
As stated in the comprehensive research report, Salla has reportedly raised $130.0 million to “scale its e-commerce-as-a-service platform servicing the MENA region, and Shadowfax, a logistics provider in India, raised a $100.0 million Series E.”
The PitchBook report concluded that the Indian subcontinent continues to be “a highly sought market for retailers, with notable precursors in Q2 including a $350.0 million investment in Flipkart from Google.”