E-commerce enablement investments increased QoQ, producing $2.7 billion across 96 deals, deltas of 51.4% and -7.7%, respectively. This, according to an update from PitchBook.
PitchBook noted in its research report that deal value was “propped up by one outlier deal: Clio’s $900 million Series F to manage legal-office commerce operations.”
PitchBook also mentioned that YTD investments are “pacing slightly below the same period in 2023: The $7 billion invested represents a 6.7% decline while the 301 deals represent a 20.2% decline.”
PitchBook pointed out that since the beginning of 2023, the sector has found a new steady state, “producing an average of $2.4 billion across 113 deals.”
The research report from PitchBook added that “only Q3 2023 produced higher deal value ($2.8 billion) during this time, but both this figure and the current average sit well below the 2018-2022 quarterly average of $6.2 billion invested.”
The pandemic-era online-only shopping experiences, “characterized by low interest rates, stay-at-home restrictions, and discretionary savings boosted by stimulus checks, are now in the rearview mirror.”
PitchBook further noted in its research report that while e-commerce’s share of total retail transactions continues “to rise, growth rates are in line with the pre-pandemic trajectory. Deal activity in Q3 reflects several key investment categories for digital commerce.”
BNPL providers raised a category-leading $370 million “across three deals, followed by conversational commerce startups at $200 million across five deals.”
E-commerce-as-a-service platforms also had “a strong quarter, raising $181.6 million across six deals.”
PitchBook further noted that this capital allocation signals “opportunity for flexible, verticalized, and API-first services that enable retailers to meet shoppers via their preferred shopping and payment platforms.”
Several thematic investments in Q3 underscore category growth vectors:
For instance, verticalized platforms remain attractive: Startups providing “technology for specific domains garnered investor attention.”
Notable capital raises targeted “law firms (Clio, $900 million), travel (FLYR, $295 million; Engine, $140 million; Numa, $32 million; and Turneo, $2.2 million), cannabis (LeafLink, $125.0 million), automotive (Numa, $32 million, and Caramel, $21.4 million).”