Miami’s next unicorn? OpenStore Closes $32M Funding Round at $970M Valuation
By Riley Kaminer and Nancy Dahlberg
There is a new unicorn among us. Well, at least if you round up.
OpenStore, the Miami-based e-commerce startup, just announced a $32 million fundraising round in a round led by Lux Capital. Despite the current market downturn, OpenStore’s valuation of $970 million represents a 25% increase from its previous fundraising 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 its launch in 2021.
“The round was anticipated,” said OpenStore co-founder and CEO Keith Rabois. Tech Crunch. “We have a good amount of capital on the balance sheet and were looking to increase next year, but Lux approached me. I respect them and their strategy and was receptive to working with them.
OpenStore acquires US 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 to just one hour.
“Algorithmic Proprietary Liquidity is a crucial next step in the evolution of e-commerce. That’s why we led the new $32 million venture capital round for Miami-based OpenStore,” Lux Capital tweeted. Josh Wolfe, founder and managing director of Lux Capital, called the OpenStore model “the future of online retail”.
Serial entrepreneur Rabois is also a general partner of the Founders Fund and has been a strong 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 has provided fertile ground for a rapidly growing industry of e-commerce aggregators. Yet recently, as consumer habits have returned to the real world, the industry has seen layoffs and downsizing.
Not OpenStore though. The company now has more than 100 employees, tripling its size this year. Contrary to the trend of remote work, Rabois and his team are committed to creating 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, doubling its office space to more than 40,000 square feet. “We’ve found that in-person work has been extremely valuable for execution and innovation,” said Lanter, chief product officer of OpenStore. Refresh Miami.
With 30 vacancies currently, OpenStore is looking for engineers, data scientists and designers as well as marketers and operators for the companies it has purchased, Lanter said.
The company also continues to rapidly increase the pace at which it buys businesses. This latest round of funding will go towards these two activities: developing its team and its brand portfolio. Recent brand acquisitions include Jack Archer, Barn Chic Boutique, Yogaste and Wearva.
What is the key to OpenStore’s success? “We have been disciplined, applying the same principles I have for 23 years,” Rabois said. OpenStore maintains that this is just the beginning. In the 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 its online storefronts and help customers find these unique and cool 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 also works in difficult times. “Ultimately, we want to provide certainty for Shopify entrepreneurs in this uncertain economic environment. Shopify owners can come to us at any time and if they qualify they will receive a cash offer for their business. Lanter said, adding that the ultimate goal is to provide instant offers.
Miami has seen a proliferation of similar businesses in recent years. More recently, business funding platform Boopos raised $58 million in Series A, while e-commerce lending startup SellersFunding dramatically accelerated its growth. Elsewhere in the e-commerce space, Shopify review platform Okendo scored a $26 million Series A and Amazon price optimization platform Probasee scored a round 2. .3 million.
This report was updated on September 23.
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LISTEN: A recent episode of the Miami Tech Pod with Keith Rabois