Five months after we announced our Series A last year, we’re thrilled to announce that Convictional has raised a $40 million Series B round, led by YC Continuity.
1000+ businesses joined the Convictional platform in 2021. Before using Convictional, retailers like Indigo and Harry Rosen were only able to onboard 4-5 net new brands a quarter and their supplier onboarding times averaged 2-3 months. With Convictional, they’re able to onboard 20-30 brands a quarter and their onboarding times average ten days.
Our traction in 2021 helped us increase the number of orders flowing through Convictional by 7.6x compared to 2020. Gross Merchandise Value (GMV) that passed through Convictional increased by 4.9x. We also nearly 4xed the team (and we’re hiring for so many more roles right now).
Our mission is to make it easy for retailers to connect with their dropship, marketplace, and wholesale suppliers so that they can offer fresh and differentiated experiences to consumers quickly. To advance that mission, this round of funding will be directed to:
- Accelerate product innovation, specifically with features for wholesale trade relationships,
- Expand our sales and marketing efforts towards new customer acquisition, and
- Pursue our vision to enable every company, of every size, to automate B2B trade.
Solving retail’s biggest hidden problem
Before we met at Shopify, [our co-founder and CEO] Roger led ecommerce operations for GNC Canada. He was forced to onboard GNC’s suppliers using electronic data interchange (EDI) and experienced its challenges firsthand.
For a data protocol that’s notoriously slow and cumbersome, EDI has been extremely resilient in retailer-supplier relationships. Retailers continue to use it even though onboarding a single supplier with EDI takes anywhere between one to three months.
In a world of constantly evolving consumer preferences, retailers have to be fast and nimble to attract the hottest DTC and ecommerce brands to become their partners.
"The retailers that are thriving have today found a unique playbook to co-exist with the continued rise of the global mega-marketplaces. That playbook includes three things: identifying emerging brands before they become household names, onboarding and promoting them at lightning speed, and helping these brands tell their stories to the world,” says industry expert Rick Watson, founder of RMW Commerce Consulting.
EDI prevents retailers from onboarding and promoting brands at lightning speed. Its high costs and long implementation times mean that brands either go live with a retailer too late or they don’t go live at all. Supplier churn is one of the biggest issues we see retailers face with EDI. Brands don’t want to wait months to get transactional with a retail partner — they want to go live in days.
Growing the supplier enablement movement
At Convictional, we’re obsessed with helping retailers and suppliers trade faster and better. We don’t think it should take a miracle to get your brand partners live on your dropship, marketplace, or wholesale program.
Our approach to solving this problem is by placing suppliers at the center of the onboarding experience. Suppliers can connect their products and inventory with retailers with our one-click integrations. Our guided onboarding flows enable suppliers to launch with their partners quickly and reduce the time it takes to get their first order.
When suppliers onboard themselves, retailers can add a broader assortment of products and test new categories with the click of a button, leading to a constant stream of fresh and differentiated experiences for customers. We call this supplier enablement.
“Supplier Enablement software like Convictional's is one of the critical enablers to the new retail playbook, and I have been continually impressed by the quality of their software and the benefits it offers their customers,” says Rick Watson.
RMWCommerce research showed that large retailers leveraging Convictional’s Supplier Enablement software achieved transformational results with implementation times as little as 60 days. The upper limit for new vendor onboarding time in legacy solutions was reported as 2 months and retailers averaged 1 to 2 net new suppliers onboarded per month. With Convictional, 4-day onboarding was achieved for many vendors, with retailers easily onboarding up to 20 net new vendors a month.
Convictional is adding real, transformative value to our customers every day. Last year, we worked with Indigo to simplify their supplier onboarding process. We reduced their average supplier onboarding time by 88%, from three months to ten days.
“Indigo's ongoing commitment to giving a platform for small and local businesses, in addition to large vendors, is realized through the most seamless vendor experience with Convictional,” says Andrea Limbardi, Chief Digital Officer, Indigo.
For one of our latest customers, MADE.COM, we created an onboarding system that allows their brand partners to onboard in 30 minutes or less. We did this by creating a technical integration that fits directly into their existing systems to ease the burden of onboarding new sellers.
“MADE.COM partnered with Convictional to help power its curated marketplace. The speed and ease with which designer markers, artisans and smaller brands can be onboarded helps to expand MADE's homewares range through a dropship model,” says Geert Engels, Chief Technology Officer, MADE.COM.
With this latest round of funding, we’re well positioned to serve retailers and brands better and grow the supplier enablement movement.
We’re investing in features that expand our ability to service wholesale trade relationships for retailers and brands. As a retailer, if you can connect and transact with a dropship supplier in one click, you should be able to do the same with your wholesale suppliers. We’re also expanding our EDI capabilities for retailers so that they can connect suppliers to their existing EDI systems in minutes.
“Supplier Enablement software like Convictional's is one of the critical enablers to the new retail playbook, and I have been continually impressed by the quality of their software and the benefits it offers their customers,” says Rick Watson.
Welcoming Ali Rowghani to our board
As a member of YC’s Winter 2019 batch, this round of funding deepens our relationship with Y Combinator. YC Continuity invests only in the very best, category-defining YC companies. Some of their portfolio companies include Checkr, Deel, Segment, and Stripe.
We’re excited to share that YCC’s managing director Ali Rowghani is joining our board as part of their investment in Convictional.
Ali Rowghani is managing director of YCC, where he built the team and fund from inception. He led YCC's investments in Stripe and DoorDash and is on the boards of several YC companies, including Checkr, Gusto, Ironclad, Deel, Pave, among others, and previously sat on the board of Segment (acquired by Twilio). He is also a Restoration Hardware (NYSE: RH) board member. Ali served as COO of Twitter from 2012 to 2014, where he was in charge of Twitter’s product, design, business development, developer platform, and media teams. He was hired as Twitter’s first CFO and served in that role from 2010 to 2012. Previously, Ali spent nine years in several roles at Pixar Animation Studios, including CFO and SVP of strategic planning. Ali holds a BA and MBA from Stanford.
Before we even started talking about partnering with YC Continuity, we learned about what it meant to enter the next phase of Convictional through Ali's writings. The definitions we use internally for what's important and how we are going to grow the company originate from Ali. It was completely natural to talk about how things were going and where we needed guidance when we did start talking, because we were all using the same definitions. Partnering with Ali and YCC is the best case scenario for us as founders, and for the rest of the company.
We asked Ali why YCC decided to invest in Convictional. "Convictional is modernizing B2B trade by making it drastically easier for retailers and brands to integrate," said Ali. "Dropshipping is a $100B+ market in the US alone — and that is only a fraction of the overall wholesale opportunity they can serve with time. What is most exciting is that Convictional can help grow that opportunity even further: the easier it is for buyers and sellers to work together, the more products they can both sell."
"Convictional is modernizing B2B trade by making it drastically easier for retailers and brands to integrate."
Creating a world-class distributed culture to serve our customers better
Convictional has always been distributed. What’s kept our team together as we’ve grown is our culture. While most startups live on their instant message platforms, we’ve chosen a different path. Our no Slack, few meetings, all email culture incentivizes individual autonomy, thoughtful documentation, and deep work. This environment helps our team focus on how they can really move the needle for retailers and suppliers on Convictional.
We’ve invested in a culture of learning, where team members carve out time during the workday to improve their skills and knowledge. We take learning seriously here — everyone on the team is held accountable for documenting and sharing their learning with the rest of the company. By learning fast and often, our team can quickly adapt to the needs of our customers in real time.
We favored a unique approach with every person we brought on to the team in the early days. In our system for tracking candidates, we always ask an important question: what can you learn from this person?
The result is a team with expertise that overlaps our customer's worlds. We are technology experts sitting next to retail and marketplace experts. We feel that without considering both perspectives, you can't reach the theoretical maximum state for the product or experience. We will use these resources to continue to add more talent across both spheres.
We’re proud of the culture we’ve built here and we believe it’s an advantage to creating value for our customers. If you’re ambitious, highly entrepreneurial, and an action-oriented individual looking to do the best work of their career, we’d love to hear from you. We’re hiring for multiple roles across all our teams. Check out our team handbook to understand our culture even better.
Join us in this next phase of growth
Are you a retailer looking for a solution to solve your supplier onboarding challenges?
Are you a brand who wants to unlock omnichannel growth by partnering with a retailer on their marketplace, dropship, or wholesale programs?
We can help — contact us to get started with Convictional.
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