Swap Banks Invests $40M in Cross-Border Trade Tools

Navigating Increased Trade Complexities: Swap Secures $40 Million in Funding

The introduction of new tariffs globally is poised to create substantial hurdles for international trade. In related news, Swap, a London-based startup focused on providing e-commerce businesses with tools to streamline cross-border transactions, has announced a $40 million funding round to facilitate expansion.

Series B Funding Details

Iconiq Growth spearheaded the Series B investment, with additional participation from Cherry Ventures, QED Investors, Portfolio Ventures, and 9900 Capital. These funds will be allocated towards expanding Swap’s current operations within the U.K., and extending its reach into key markets including Europe, the U.S., Australia, and Canada.

Demonstrated Business Growth

Swap is experiencing notable growth, currently serving a customer base of approximately 500 brands. The company’s platform consolidates logistics and shipping management, encompassing inventory control, returns processing, and product recycling – functions often handled inefficiently by businesses.

Industry Focus and Future Development

Initially gaining traction within the fashion sector, Swap intends to tailor its software solutions to meet the unique requirements of other industries, such as beauty, home goods, and consumer electronics.

The Genesis of Swap

Sam Atkinson, CEO of Swap, explained that the company’s origins lie in the personal experiences of himself and co-founder Zach Bailet within the e-commerce landscape. Prior to Swap, the pair established Slow Goods, a direct-to-consumer business specializing in sourcing handmade products from Africa for import and global distribution.

“The logistical challenges were considerable,” Atkinson stated. “We were procuring items like shawls, rugs, and lampshades from Burkina Faso, importing them into the U.K., and then fulfilling orders internationally.”

Challenges and Pivoting to a Solution

Over an 18-month period, the complexities of managing the business proved insurmountable. “We were unable to sustain the operation,” Atkinson admitted. “However, we gained invaluable insights into the intricacies of launching an e-commerce venture and the difficulties associated with importing and exporting goods.”

Building Expertise and a New Venture

Following this experience, both Atkinson and Bailet pursued consulting roles at McKinsey and Deloitte, respectively. Atkinson later joined Juni as head of strategy. Driven by a desire to collaborate once more and leverage their accumulated knowledge, they resolved to address the logistical challenges they had previously encountered.

Technical Expertise and Global Teams

Interestingly, neither founder possesses a formal technical background. The platform’s technical infrastructure is being developed by a team in Israel, led by Oron Bendavid, Swap’s VP of Engineering, with an additional engineering team based in the Netherlands.

Market Opportunity and Future Projections

Swap cites forecasts indicating that the global cross-border market is projected to reach $7.9 trillion by 2030. This substantial growth presents a significant opportunity for companies like Swap – and competitors such as Shopify – to cater to smaller businesses seeking to expand their online reach without relying solely on platforms like Amazon.

Tariffs and the Drive for Efficiency

Given the market’s current size exceeding $1 trillion, the potential implementation of tariffs is likely to further incentivize efforts to enhance efficiency and minimize the costs associated with international shipping, according to Seth Pierrepont, who led the investment for Iconiq Growth.

“The trend towards increased protectionism is readily apparent,” Pierrepont noted. “Cross-border supply chains were already complex, and the current environment is adding to those challenges. We believe software providers are uniquely positioned to mitigate these difficulties.”

The Value of Unified Data

Pierrepont emphasized the importance of a single vendor providing comprehensive logistics tools, highlighting the benefits of unified data. “Consolidating these solutions within a single platform provides a cohesive data stream, enabling more sophisticated operational insights and facilitating advanced capabilities over time,” he explained. “Furthermore, the company is experiencing remarkably rapid growth.”