Miami’s next unicorn? OpenStore closes $32M funding round at $970M valuation
By Riley Kaminer and Nancy Dahlberg
There’s a new unicorn in our midst. Well, at least if you round up.
Miami-based e-commerce roll-up startup OpenStore has just announced a $32 million fundraise in a round led by Lux Capital. Despite the current market downturn, OpenStore’s valuation of $970 million represents a 25% increase from their previous fundraise of $75 million last year.
Overall, OpenStore has raised over $150 million in equity funding from investors including Atomic, Founders Fund, General Catalyst and Khosla Ventures since launching in 2021.
“The round was preempted,” OpenStore co-founder and CEO Keith Rabois told TechCrunch. “We have a fair amount of capital on the balance sheet and were looking to raise next year, but Lux reached out to me. I respect them and their strategy and was receptive to working with them.”
OpenStore acquires US-based direct-to-consumer brands with between $1 million and $10 million in gross merchandise volume on Shopify. The startup is able to vet a business and make an offer within 24 hours. With this funding round, OpenStore hopes to reduce that lag time to as little as one hour.
“Algorithmic owner liquidity is a crucial next step in the evolution of ecommerce. That’s why we led the $32 million new VC round for Miami-based OpenStore,” Lux Capital tweeted. Josh Wolfe, founder and managing director of Lux Capital, called OpenStore’s model “the future of online retail.”
Serial entrepreneur Rabois is also a general partner at Founders Fund and has been a vocal supporter of the #MiamiTech movement since relocating from the San Francisco Bay Area during the pandemic. Jack Abraham, founder and managing partner of Atomic VC, also co-founded the company alongside Rabois, former Apple, Facebook and Opendoor engineer Matt Lanter, and former Google engineer Jeremy Wood.
The pandemic-induced e-commerce boom provided fertile ground for a rapidly growing industry of eCommerce aggregators. Yet recently, as consumer patterns have shifted back to the real world, the industry has experienced layoffs and downsizes.
Not OpenStore though. The company has expanded to more than 100 employees – tripling its size this year. Bucking the remote work trend, Rabois and the team are committed to building OpenStore in-person: Everyone works in the same Wynwood office.
The company is expanding to an additional floor in the Gateway building early next year, more than doubling its office space to over 40,000 square feet. “We found that working in person has been super valuable for both execution and innovation,” Lanter, OpenStore’s Head of Product, told Refresh Miami.
With 30 open roles currently, OpenStore is looking for engineers, data scientists and designers as well as marketers and operators for the businesses it has purchased, Lanter said.
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The company continues to rapidly increase the pace at which it buys businesses, too. This latest round of funding will go toward both of these activities: growing its team and portfolio of brands. Recent brand acquisitions include Jack Archer, Barn Chic Boutique, Yogaste, and Wearva.
What is the key to OpenStore’s success? “We’ve been disciplined, applying the same principles that I have been doing for the past 23 years,” Rabois said. OpenStore argues that this is just the beginning. Long-term, the company hopes to develop a new type of shopping experience that more meaningfully connects merchants and customers by leveraging data, information, and capital.
“We want to bring the experience of spontaneous discovery to online shopping,” adds Lanter. After acquiring brands, OpenStore continues to run their online storefronts and help customers find those cool, unique products but more may be in store. “We’re in an early test of building a unified shopping experience,” he said.
And it’s a model that works in trying times, too. “Ultimately, we want to provide certainty for Shopify entrepreneurs during this uncertain economic environment. Shopify Owners can come to us at any point and if they qualify will get a cash offer for their business.” said Lanter, adding that the ultimate goal is to provide instant offers.
Miami has seen a proliferation of similar businesses over the last few years. Most recently, business financing platform Boopos raised a $58 million Series A, while e-commerce lending startup SellersFunding significantly accelerated its growth. Elsewhere in the e-commerce space, Shopify review platform Okendo scored a $26 million Series A, and Amazon price optimization platform Profasee scored a $2.3 million seed round.
Source: Refresh Miami
