Gorgias valuation stands at $710 million with $30 million Series C for e-commerce customer support – TechCrunch
Gorgias, which develops customer service tools for e-commerce businesses, raised $30 million in new Series C capital in a round that took its valuation to $710 million.
Transpose Platform and Shopify led the round and were joined by previous investors Jason Lemkin of SaaStr, Rajeev Dham of Sapphire Ventures, CRV and Alven.
It’s been a few years since we profiled the company, which has total funding to date of $72.4 million. By the end of 2020, the company had raised $25 million in Series B funding at a valuation of $305 million. The company was valued at $680 million before this round, Gorgias co-founder and CEO Romain Lapeyre told TechCrunch via email.
At the time of Series B, it supported over 4,500 stores with its technology that brings together all the channels shoppers use to contact online stores into a single stream for each business. This way, support tickets can be handled in a variety of ways, including live chat, email, phone, text, messaging apps, and social media.
Today, the six-year-old company works with more than 10,000 online stores, including Princess Polly, Steve Madden, Olipop and Marine Layer, which sell products through Shopify, BigCommerce and Adobe Commerce.
It also has 245 employees in its offices in San Francisco, Paris, Toronto, New York, Sydney, Belgrade and Charlotte.
Over the past year, Lapeyre said brands have seen their advertising costs rise on channels like Facebook and Google, in some cases five times their previous rates, “which is exhausting that playbook.”
“The combination of ongoing supply chain issues and the higher cost of raw materials and direct-to-consumer brands are feeling the squeeze on margins at both ends,” he added.
Instead, he believes that to succeed in this type of environment, “DTC brands need to generate more money from their existing customers” by improving the customer experience. Gorgias offers information on how to achieve this with a DTC growth manual that Lapeyre says can generate 44% more revenue for his e-commerce clients.
Meanwhile, Gorgias has more than doubled in size since his Series B, Lapeyre said. Besides the 10,000 online stores and 245 employees, it has twice as many customers, and its annual recurring revenue and valuation have also more than doubled.
“The environment in which we work has changed a lot,” he added. “The 2020 e-commerce boom that helped fuel our growth until our Series B has subsided, but now has never been a better time to improve the customer experience of online stores. Low and higher acquisition costs are forcing businesses to derive more revenue from existing customers, and customer experience is at the heart of this effort.
Even with all of this growth, the company is watching its rate of cash burn in this new economic environment. The company’s early goals were “to hire and grow sustainably,” Lapeyre said. However, he “slowed down hiring on the go-to-market side, assessed where we can cut costs, and asked the team to be smart about how we use the money we have.”
In fact, Gorgias wasn’t planning on raising new venture capital so soon, but Lapeyre said he jumped at the chance to work with Transpose Platform and Shopify.
The company will use the new funding to accelerate development of its Automation Extension feature, which can divert up to a third of incoming repetitive support tickets by providing customers with instant responses. It also has a new feature coming soon called Revenue Add-on, which will identify customers who can generate additional revenue through online customer services.
“Ticket automation and prioritization will help meet merchant revenue goals by better identifying shoppers ready to buy and increasing conversion rates through proactive support – an innovation in today’s helpdesk market,” added Lapeyre. “This is made possible by the volume of e-commerce specific support tickets handled by the Gorgias platform, which are used to train the company’s proprietary algorithms to appropriately detect intent and auto-tagging. .”