Mobile e-commerce startup Shopgate announced its Series B funding round today, which it revealed to TechCrunch totals $7 million in an interview. The Germany and Palo Alto-based company offers retailers custom native app and mobile web development for their online stores, which Shopgate co-founder Andrea Anderheggen says can help retailers increase their sell-through rates on mobile by between 5 and 15 percent on average, depending on whether they’re starting with responsive design-based websites or just traditional web commerce pages.
Where Shopgate differs from other solutions is that it integrates with popular web-based e-commerce platform provider APIs, like Magento, which means that they’re pretty much plug-and-play with most of the online store backends that retailers are already using. And unlike some other solutions, Shopgate isn’t taking sides in the debate of mobile web vs. mobile apps; it offers both native apps for iOS and Android, as well as mobile-optimized websites, which Anderheggen says is crucial because while mobile browsing is leading to higher mobile conversion rates for online stores, shoppers are still pretty choosy about how they prefer to shop.
“What we’ve seen is that mobile commerce will become a huge reality,” he said. “The simple fact that people are visiting the Internet on a mobile device leads to the fact that they’ll also be buying on a mobile device, like they buy online. That wasn’t so clear when we founded Shopgate three years ago, but it has become very clear now. There’s no doubt about that anymore.”
“What we saw is that consumers have different preferences,” Anderheggen explained further. “A large percent of users prefer to browse the web using Safari or other mobile browsers, then there’s another group, a large group, that prefers using native apps… and what we saw is that the merchants, apart from a few huge players like eBay or Amazon that can afford to pay an agency or in-house developer to program iOS apps or Android apps, largely cannot afford to invest $500,000 to over $1 million in a mobile store, in native apps.”
To further capitalize on the growth of mobile commerce, which a recent IDC report suggested will reach $1 trillion by 2017, Shopgate is planning to hire more staff with this round, as well as invest in continued expansion, specifically in the U.S. market. Anderheggen also shed some light on some of the company’s upcoming product plans, which include building a worldwide affiliate network that would allow any app int the App Store can sell the product with an in-app store provided by Shopgate and earn a commission, as well as plans to help brick-and-mortar retailers leverage their e-commerce presence to bring more shoppers in-store.
Shopgate’s funding round was led by Danish firm Northcap and Creathor Ventures out of Germany. Creathor has been an investor from the start, and Anderheggen said that Shopgate chose Creathor to come on board because of the company’s extensive expertise m- and e-commerce services, as well as its experience helping European startups expand aggressively on a global scale.