Swell Raises $20M for Headless Commerce Development

The Evolution of E-commerce and the Rise of Headless Commerce

Launching an online store through established marketplaces like Shopify offers a straightforward entry point for many businesses. However, the Swell team identified limitations in this model, recognizing that it could only facilitate growth to a certain extent.

Swell is pioneering a “headless” commerce approach. This involves decoupling the customer-facing storefront from the back-end systems that manage data. The aim is to deliver a superior shopping experience and enable seamless updates and maintenance of the back-end without impacting the front-end presentation.

Swell's Comprehensive Toolset

This remote-first company provides a suite of tools, including APIs, storefront solutions, and a centralized dashboard. These resources are designed to scale alongside businesses of any size.

Initially, Swell offered a purely API-driven solution for developers. However, CEO Eric Ingram explained to TechCrunch that this approach didn’t allow businesses to quickly establish an online presence, leading many to opt for platforms like Shopify.

“While Shopify excels at facilitating a rapid start, businesses soon encounter constraints when attempting to move beyond the basic functionalities,” Ingram stated. “Our objective was to create a platform that matched Shopify’s ease of use while simultaneously empowering sustained growth.”

He further emphasized that most companies lack the resources to construct their own back-end infrastructure, so Swell aimed to provide a viable alternative without requiring multi-million dollar investments.

From Concept to Funding

The concept for Swell originated approximately ten years ago, drawing from Ingram’s experiences at Digital River and through the development of his own entrepreneurial ventures, including a clothing brand.

He and his team officially launched the company in 2021, securing $3.4 million in seed funding.

Less than a year later, Swell has secured an additional $20 million in Series A funding. This round was led by VMG Catalyst and Headline, with participation from Bonfire Ventures, Willow Growth, Commerce Ventures, and Red Antler.

Notable individual investors include Brian Long, CEO of Attentive; Romain Lapeyre, CEO of Gorgias; Remote First Capital; Andreas Klinger, former CTO of Product Hunt; Domm Holland, CEO of Fast.co; and Brian Magida of Warby Parker.

Differentiating Swell in the Market

According to Ingram, the opportunity for further funding was somewhat unanticipated. He believes Swell’s focus on serving small and mid-market businesses, coupled with its commitment to building a robust ecosystem and community, distinguishes it from competitors like Commercetools and Fabric, which primarily target larger enterprises.

“To effectively address the challenges faced by businesses, the solution must be accessible to all, not just those with substantial financial resources,” Ingram added. “Certain platforms specialize in a limited range of functionalities, while the market encompasses a diverse array of business models.”

Growth and Future Development

Over the past year, Swell experienced a fivefold increase in revenue and expanded its customer base to over 1,000 by the end of 2021, starting the year with just 30 customers.

The company also introduced a free community plan, allowing customers to begin selling before incurring any costs, alongside its standard and enterprise offerings.

Ingram plans to allocate the new funding towards expanding Swell’s team from 30 to 100 employees within the next 12 months. Investment will also be directed towards product development, specifically the creation of an app ecosystem.

Future plans include establishing a framework for third-party app development and empowering customers with greater control over their data on the back-end. This level of data ownership is often unattainable for businesses operating solely on marketplaces.

“A key feature will be a customizable database capable of adapting to evolving business needs,” he explained. “The market is rapidly evolving with new integrations and app development, and scaling the community will require a significantly larger team.”