Italy’s Commerce Layer raises $6M led by Benchmark for its headless e-commerce platform

In the world of commerce, the last few months have underscored the fact that every retailer, brand and entity that sells or distributes something needs to have a digital strategy. Today, one of the startups that’s built a platform aimed at giving them more control in that process is announcing a Series A to continue expanding its business.

Commerce Layer, which has built a “headless” e-commerce platform — used to develop online sales strategies that use APIs to plug your inventory to take orders and payments from a variety of endpoints like other marketplaces, your own site and app (and the various payment systems you might use depending on the country you’re selling into), messaging services, social channels, and more — has raised a Series A of $6 million, which CEO and founder Filippo Conforti said the startup will be using to continue expanding in more geographies and adding in more endpoints to fit the needs of its current (and future) customers.

The funding is being led by Benchmark Capital, with participation also from Mango Capital, DAXN, PrimeSet, SV Angel, and NVInvestments. The startup is based out of Italy — specifically, just outside of Florence in Tuscany. And so the funding is notable for a few reasons: first, for the investors; second, what it says about this particular category in the tech ecosystem right now; and third, that even in what was at one point the epicenter of the COVID-19 outbreak in Western countries, we are seeing signs of recovery and activity in the tech ecosystem.

In fact, Commerce Layer was talking to Benchmark and others in the Valley well before the outbreak of the pandemic, and the term sheets with those investors were signed in January, also before things really kicked off in Italy. What took significantly longer was the process after, in which many individual investors in the startup, based in Italy, had to sign off paperwork related to the new investors and the fact that Commerce Layer was also incorporating in the US as part of that deal. All of that was handled remotely.

The world of e-commerce has changed a huge amount in the last couple of decades. The early days saw people ‘shopping’ online but ordering through email, eventually giving way to having your own site or selling perhaps on a marketplace like eBay or Amazon. Modern times have made that process both easier and more complex.

Complex, because brands and retailers now have a large array of options and permutations for how to sell something, both on their own sites as well as on a number of other platforms (some, as we have described before, have foregone sites altogether).

Easier, because the rise of APIs to enable developers to plug into a number of other systems without building everything themselves from scratch (including, even, platforms like RapidAPI, which has also recently raised $25 million, to help organise and manage how those APIs are used).

This is where Commerce Layer fits into the picture, with an API-based system that is able to manage multiple SKUs, prices, and inventory data to help its customers sell in any currency, with distributed inventory models, and global shipping that makes it easy to add or adjust where and when you are selling, be it across your site or app, or a different platform altogether.

There are a number of tools on the market today to enable the very smallest, and the very biggest, merchants to develop and power online sales for brick-and-mortar or pure-play e-commerce companies and brands; and there are even a number of “headless” options out there.

The wider list is pretty extensive, but some of the bigger names include Shopify, BigCommerce, Commercetools, and Ecwid and Strapi (both of which also announced funding just last week, see here and here).

Conforti — who got his start in e-commerce a decade ago when building online commerce solutions for Gucci — acknowledges that the competitive landscape is indeed very big, but also believes that the key lies services like his being significantly younger, and thus more modern and easy to use, than even the legacy headless systems or services developed by older e-commerce enablers.

“Being headless is mandatory in order to provide a truly omnichannel experience to customers,” Conforti said. If you’re not API-first that is a flag, he added. “Everyone knows it’s the future, and the present.” He said that he considered Commercetools, another European company, “the only real competitor” although “they were born 15 years ago so you get some older technology. Commerce Layer is more fresh with more modern APIs.”

Customers of Commerce Layer include Chilly’s (the fashionable water bottle company), Au Depart, Richard Ginori and more, who Conforti says help shape what his startup builds next: for example one of its customers wants an integration with Farfetch, the high-end fashion marketplace, and so they are building that to subsequently offer it as an option to others.

Eric Vishria, a general partner at Benchmark who is joining the board of the startup with this round, said that the distinction is great enough between what Commerce Layer has built and what already exists on the market to take a bet on the company.

“Right now there is a huge gap between the mom-and-pop, give-me-a-generic-template-based-storefront-quickly, and the invest-a-hundred-engineers-and-millions-of-dollars-to-build-everything-from-scratch,” he said. “The most likely approach to fill that need is the JAM stack and API approach – like Commerce Layer, which will give companies radically more flexibility to create unique experiences than a template. But allows them to build quickly and inexpensively by assembling building blocks rather than everything from scratch.

“We committed to investing in Commerce Layer before the pandemic took hold, but I couldn’t be more delighted to invest in a company founded in Italy right now. The fact that the team continued to build and grow in Italy through this all is a testament to the entrepreneurial spirit.

Benchmark once had a full European arm, which separated and now goes by the name Balderton. Meanwhile, it has also continued to invest in a number of startups in the region from its own funds, including Zendesk (Denmark), Elastic (Netherlands), Contentful and ResearchGate.

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