The current slowdown in e-commerce growth, and in some pockets straight declines in spend, might not seem like the most opportune time to build an e-commerce tooling startup — let alone invest in one. But a startup out of Poland with a platform for front-end developers to build composable e-commerce sites has just raised $20 million on the back of strong interest in the market. Vue Technology, which is building what it describes as “frontend-as-a-service”, has closed a $20 million round of funding, which it plans to use both for R&D, to bring on more tools targeting B2B e-commerce businesses, and for business development after seeing revenues grow 300% in the last 18 months. It has some 2,000 customers — retailers and merchants — with particular growth at the moment in the U.S.
The funding is being led by Felix Capital, a big player in e-commerce investing particularly in Europe, with Philippe Corrot, founder & CEO of Mirakl; Nagi Letaifa, Head of Engineering at Mirakl; and previous backers Creandum, Earlybird and SquareOne also all participating. Julien Codorniou, the ex-Facebook exec who is now a partner at Felix, is also joining the board.
The company is describing this as a “Series A+”, with the Series A in 2022 bringing in $17.4 million to the company. This is at a “slightly” higher valuation, so technically not part of that round, although Vue’s CEO and co-founder Patrick Friday, and its investors, are not talking numbers on that front. Friday added that the reason for not calling this a Series B is also because the company wants to wait until the market settles down to raise what it believes will be a much bigger round at a much higher valuation. Rather disconcertingly, he thinks that won’t be for another two years, “at least.”
The company’s roots are in open source, and it still runs a popular open source version of the software (the community for which has 19,000 members it says) that helped it gain its initial popularity and traction in the market. As with that, the commercial version’s position is that using a composable framework — essentially by using APIs to pull in different tools that have been built to improve functionality and usability to let them work together — to tackle the front-end is in line with how back-end development has been evolving, and in all cases results in developers saving time, and in theory producing front end interfaces that work better as a result, and can be more flexibly maintained to optimize purchasing conversions and engagement.
Friday said it’s part of the trend of “detaching the monolith” in architecture. “For last 20 years, people would just buy everything from one vendor and that’s it. But now you might get a backend from one vendor, search from another, CMS from another, payments from another, and so on. The front end is the perfect place for integrations. We integrate with all of that and put the whole thing together.” Indeed, companies like Shopify, as well as headless e-commerce platforms like Commercetools have changed the game for smaller as well as larger merchants: the theory here is that Vue represents the next step on that trajectory — albeit one that others in the same space might also be looking to tackle with more focus in the longer term. All that is alongside other startups also focused on the front end, like Shogun in the U.S.
The company has some 30 integrations as part of its commercial product, with hosting options and pre-built versions of some of the most popular components, alongside API orchestration tools to manage the different components that do get put together.
Alongside the round, Vue is also announcing a new CTO, Tim Drijvers, who is coming on from Sendcloud (so perhaps expect to see more direct customer tools to add shipping and logistics into the front end mix?). Filip Rakowski, who is the other co-founder of Vue and had been the CTO, will be taking on a new role as “chief developer experience officer.”
Felix has been focusing deeper into less developed markets in Europe as part of its strategy to tap less exposed and more emerging startups where others might not be looking, and this Vue investment underscores that, but also the idea of backing those who are helping e-commerce businesses do business in today’s market conditions.
“E-commerce’s growth has slowed down but everybody’s looking for solutions to improve customers’ experience and more importantly conversion ratios,” Codorniou said. “Vue’s open source roots are also a big plus as prospects can try before they buy and rely on a very active and vibrant community of developers and partners who contribute to making the product better every day.”