Pattern Bags Sees $225M in Sales, CEO Predicts E-commerce Accelerator Success

Pattern Secures $225 Million to Fuel E-commerce Growth

Pattern, an e-commerce accelerator headquartered in Lehi, Utah, has received $225 million in growth funding. This investment will be utilized to further develop the company’s technology and broaden its international reach.

Valuation and Funding Details

This funding round was spearheaded by Knox Lane. According to Pattern’s co-founder and CEO, David Wright, the investment elevates the company’s pre-money valuation to $2 billion. This represents the “largest raise by a home-grown, female founded or co-founded company in Utah.”

To date, Pattern has secured over $275 million in funding, including a $52 million Series A round announced in August 2020.

Company Growth and Mission

Established in 2013 by Melanie Alder and David Wright, Pattern anticipates exceeding $1 billion in revenue within the coming year. The company’s core mission centers on enabling brands to capitalize on the $6 trillion global e-commerce market.

This market is significantly influenced by growth in Asia and the increasing popularity of payment solutions like buy now, pay later options, Wright explained.

A Distinct Approach to E-commerce

Pattern differentiates itself from e-commerce aggregators. While aggregators acquire smaller brands selling on marketplaces to improve efficiency, Pattern’s platform collaborates with brands at no cost.

Pattern accelerates sales by purchasing brand inventory, identifying sales deficiencies, optimizing marketplace presence, and uncovering opportunities to enhance profit margins.

The Rise of E-commerce Accelerators

Wright characterized the previous year as “the year of the e-commerce aggregator,” citing companies such as Thrasio, Berlin Brands, and Perch as key players in a highly competitive landscape.

These aggregators collectively raised billions of dollars in equity and debt funding throughout 2021.

However, with the substantial growth observed among e-commerce accelerators – including Pattern, Packable, Spreetail, and Netrush – which have raised nearly $600 million in 2021, Wright predicts that the coming year “will be the year of the e-commerce accelerators.”

Accelerators vs. Aggregators

“Our theory is that Pattern and similar companies will ultimately succeed because we concentrate on fostering brand growth and effective execution, rather than dedicating resources to acquisition and EBITDA aggregation,” Wright stated.

He suggests that aggregators may face challenges in the future, potentially needing to evolve into accelerators to ensure their long-term viability.

Current Scale and Global Reach

Currently, Pattern employs over 900 individuals and collaborates with more than 100 brands worldwide.

Knox Lane’s Perspective

John Bailey, managing partner at Knox Lane, a San Francisco-based firm specializing in consumer and tech-enabled services, brings experience from previously leading e.l.f. Beauty through its IPO.

Bailey emphasizes that accelerators are undertaking “the harder battle” by focusing on building up companies. Consequently, Pattern is achieving net revenue retention rates comparable to leading SaaS providers.

“Brands are partnering with Pattern to effectively navigate the complexities of the marketplace environment,” Bailey noted. “The unique vision behind Pattern’s offering, coupled with its global execution capabilities and comprehensive understanding of e-commerce on a global scale, is particularly compelling.”

He highlighted China’s significant lead in total addressable market size, but also emphasized Pattern’s advantageous position with its early success in the U.S., alongside its profitable growth and scalability.