Nacelle Secures $50M Funding from Tiger Global

E-commerce Infrastructure Companies See Revenue Growth

The increasing consumer preference for online shopping, a trend solidified during the global pandemic, is significantly contributing to the revenue growth of companies specializing in developer tools. These tools are designed to enhance the shopping experience on e-commerce platforms.

Nacelle Secures Series B Funding

Los Angeles-based Nacelle is a prominent example of an e-commerce infrastructure company attracting substantial investor interest. The company recently finalized a $50 million Series B funding round led by Tiger Global.

This funding arrives swiftly after an $18 million Series A round, spearheaded by Inovia, which concluded six months prior. Previously, Nacelle secured a $4.8 million seed round in 2020.

The Benefits of "Headless" Commerce

Nacelle operates within the realm of “headless” commerce. This approach involves decoupling the front end – the customer-facing storefront – from the back end, where crucial data is stored. According to CEO Brian Anderson, this separation facilitates a superior shopping experience.

By disconnecting these components, the back-end systems, responsible for core functionalities, can be updated and maintained without disrupting the front-end presentation.

Evolving Customer Expectations

“While online shopping itself isn’t novel, the manner in which customers interact with it is constantly evolving,” Anderson explained to TechCrunch. He further noted that current online shopping technology often lags behind user expectations.

He highlighted the slower loading times experienced when navigating online stores compared to the responsiveness of applications like Instagram.

Mobile Shopping and App Fatigue

The growing prevalence of mobile shopping introduces friction for consumers, as downloading a dedicated app for each brand can be cumbersome. Anderson contends that this diminishes the enjoyment of online shopping.

He argues that consumers are reluctant to accumulate numerous apps on their mobile devices.

Industry Trends and Maturing Behaviors

Steven Kramer, a board member and former EVP of Hybris, stated via email that the e-commerce sector has undergone several phases of innovation over the past two decades. He believes that evolving consumer behaviors and expectations are now accelerating the current stage of development.

“Retailers and brands are facing challenges in adopting new technologies to meet the demands for agility, speed, and enhanced user experience,” Kramer added. “Nacelle provides organizations with a future-proof solution to accelerate innovation, maximize existing investments, and achieve a significant return on investment.”

Accelerated E-commerce Growth and API-Centric Services

Data indicates that the COVID-19 pandemic accelerated e-commerce growth by approximately five years. Gartner forecasts that 50% of new commerce capabilities will be implemented as API-centric SaaS services by 2023.

Competitive Landscape

These trends are attracting investment to a growing number of competitors, including companies like Shopistry, Swell, Fabric, Commerce Layer, and Vue Storefront, all of which have secured funding this year.

Nacelle's Differentiator

Anderson emphasizes the continued strength of the market and the importance of addressing the increasing share of online retail sales. He points out that some competitors require customers to migrate their existing technology infrastructure to their platforms to achieve an optimal customer experience.

In contrast, Nacelle allows customers to retain their current tech stack and integrate components as needed.

“Such migrations can be disruptive in any industry, but are particularly problematic for e-commerce,” he stated. “Your online store represents a direct pathway to revenue.”

Revenue Growth and Multiyear Contracts

Nacelle has experienced a remarkable 690% revenue growth in the past year, and customers are increasingly committing to multiyear contracts, according to Anderson.

Future Product Development

As an engineer, Anderson intends to focus on developing new products as the adoption of headless commerce expands. These include introducing a dynamic functionality layer for traditionally static storefronts and incorporating livestreaming capabilities later in the year.

Investment Allocation

Nacelle will allocate the new funding to its go-to-market strategy and expand its customer success, partner relations, and product development teams. The company is already considered “the de facto standard” for Shopify Plus merchants adopting headless commerce.

“Our goal is to provide a tailor-made API for e-commerce, empowering front-end developers with ease of use,” Anderson added. “We also offer starter kits to help merchants quickly launch and operate.”