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Tapcart, A 'Shopify For Mobile Apps,' Raises A $50 Million Series B

Shopify changed the e-commerce landscape by making it easier for merchants to set up their websites both quickly and affordably. A startup called Tapcart is now doing the same for mobile commerce.

The company, which has referred to itself as the "Shopify for mobile apps," today powers the shopping apps for top brands, including Fashion Nova, Pier One Imports, The Hundreds, Patta, Culture Kings, and thousands more. Following a year of 3x revenue growth, in part driven by the pandemic, Tapcart is today announcing the close of a $50 million round of Series B funding, led by Left Lane Capital. Having clearly taken notice of Tapcart's traction with its own merchant base, Shopify is among the round's participants.

Other investors in the round include SignalFire, Greycroft, Act One Ventures and Amplify LA.

Tapcart's co-founders, Sina Mobasser and Eric Netsch, have worked in the mobile app industry for years. Mobasser's previous company, TestMax, offered one of the first test prep courses on iOS, while Netsch had more recently worked on the agency side to create mobile and digital experiences for brands. Together, the two realized the potential in helping online merchants bring their businesses to mobile, as easily as they were able to go online with Shopify.

Tapcart's founders Sina Mobasser and Eric Netsch at their Santa Monica HQ. Image Credits: Tapcart

"Now, you can launch an app on our platform in a matter of weeks, where historically it would take up to a year if you wanted to custom build an app," explains Mobasser. "And you can do it for a low monthly fee."

Tapcart's platform itself offers a simple drag-and-drop builder that allows anyone to create a mobile app for their existing Shopify store using tools to design their layout, customize the product detail pages, integrate checkout options, include product reviews, and even optionally add other branded content, like blogs, lookbooks, videos (including live video) and more. Everything is synced directly from Shopify to the app in real-time, so the merchant's inventory, products and collections are all kept up-to-date. That's a big differentiator from some rivals, which require duplicate sets of data and data transformation.

Tapcart, meanwhile, leverages all of Shopify's APIs and SDKs to create a native application that works with Shopify's existing data structures.

Image Credits: Tapcart

This tight integration with Shopify helps Tapcart because it doesn't have to focus on the e-commerce infrastructure, as the way things are structured around inventory and collections are roughly 90% the same across brands. Instead, Tapcart focuses on the 10% that makes brands stand out from one another, which includes things like branding, content and design. Its CMS allows merchants to create exclusive content, change the colors and fonts, add videos and more to make the app look and feel fully customized.

Beyond the mobile app creation aspect to its business, Tapcart also helps merchants automate their marketing. Through the Tapcart platform, merchants can communicate with their customers in real-time using push notifications that can alert them to new sales, to encourage them to return to abandoned carts, or any other promotions. The marketing campaigns can be automated, as well, which helps merchants schedule their upcoming launches and product drops ahead of time. The company claims these push notifications deliver click-through rates that are 72% higher than a traditional email or SMS text because of their interactivity and branding.

Image Credits: Tapcart

The platform has quickly found traction with SMB to mid-market enterprise customers who have reached the stage of their business where it makes sense for them to double down on customer retention and conversion and optimize their mobile workflow.

"Our sweet spot is when you have maybe a couple hundred customers in your database," notes Netsch. "That's a perfect time to now focus less on the paid acquisition portion of your business and more on how to retain and engage those existing customers, [so they'll] shop more and have a better experience," he says.

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During the past 12 months, over $1.2 billion in merchant sales have flowed through Tapcart's platform. And in 2020, Tapcart's recurring revenue increased by 3x, as mobile apps grew even faster during the pandemic, which had increased consumer mobile screen time by 20% year-over-year from 2019. Mobile commerce spending also grew 55% year-over-year, topping $53 billion globally during the holiday shopping season, the company says. Tapcart's own merchants saw mobile app orders at a rate of more than once-per-second during this time, and it believes these trends will continue even as the pandemic comes to an end.

Today, Tapcart generates revenue by charging a flat SaaS (software-as-a-service) fee, which differentiates it from a number of competitors who charge a percent of the merchant's total sales.

Image Credits: Tapcart

With the additional funding, Tapcart plans to focus on its goal of becoming a vertically integrated mobile commerce suite of tools, which more recently includes support for iOS App Clips. It will also soon release an upgraded version of its insights analytics platform and will offer scripts that merchants can install on their mobile websites to compare what works on the site versus what works in the app.

Later this year, Tapcart plans to launch a full marketing automation product that will allow brands to automate and personalize their notifications even further. And it plans to invest in market expansions to make its product better designed for mobile, global commerce.

The funding will allow Santa Monica-based Tapcart to hire another 200 people over the next 24 months, up from the 70 it has currently. These will include new additions across time zones and even in markets like Australia and Europe as it moves toward global expansion.

Shopify's investment will open up a number of new opportunities as well, including on product, engineering, business strategy and partnerships. It will also help to get Tapcart in front of Shopify's 1.7 million global merchants.

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"There's still quite a lot of merchants that need better mobile experiences, but have yet to really double down on the mobile effort and get something like a native app," notes Netsch. "There's a lot of different ways and methods that merchants are experimenting with mobile growth, and we're trying to offer all of the best parts of that in a single platform. So there's tons of expansion for Tapcart to do just that with the existing target addressable market," he says.

"We believe brands must be where their customers are, and today that means being on their phones," said Satish Kanwar, VP of product acceleration at Shopify, in a statement. "Tapcart helps merchants create mobile-first shopping experiences that customers love, reinforcing Shopify's mission to make commerce better for everyone. We look forward to seeing Tapcart expand its success on Shopify with the more than 1.7 million merchants on our platform today."

Shopify's Revamped Mobile App Could Help SMBs Ditch The Desktop

E-commerce platform provider Shopify is rolling out a redesigned mobile app for iOS and Android that it says will let users run their entire business from a smartphone or tablet.

In addition to an overall streamlined user interface, the app includes a bevy of new features, including the ability to fulfill and manage orders, update customer profiles, modify product descriptions, and publish product photos.

The Home screen now includes a real-time view of store performance and shows the total sales and number of visitors for the day, week, or month. The app also allows users to access financial and sales reports for more detailed performance insights.

In addition, the app's Timeline communication feature, which provides in-app messaging between employees, now provides push notifications for improved collaboration.

Overall, the app update is aiming to satisfy the growing number of small business owners who want the ability to run their business on the go.

"We think the key component to this launch is that no computer is now needed to run a business on Shopify," said Shopify CMO Craig Miller. "We see the transition from computer to mobile as a growing trend in businesses especially amongst entrepreneurs."

Shopify hasn't revealed any specifics on what's powering the new app but says it was totally rebuilt from the ground up with technology developed in Shopify's lab. Shopify claims the technology will make it easier to send out new features and app updates across devices.

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Shopify's First Shop Day Shows App-Focused Strategy Is Paying Off - Forbes

Shopify's inaugural Shop Day event set records for offers redeemed and most 2023 first-time buyers.

Shopify

Could Shopify's Shop Day grow to rival Amazon's AMZN Prime Day as one of top online shopping day of the year? Shopify executives certainly hope so, and the inaugural Shop Day gave them plenty of encouragement to believe that wish can come true.

Shopify is trying to convince more consumers to think of its Shop app as the go-to, one-stop destination for all their shopping needs, whether online or in-store.

It is facing new pressure from Amazon on the mobile shopping and convenience front. Amazon recently began allowing online retailers to offer a "Buy with Prime" button on own their sites that Prime members can use to get Prime shipping benefits even when not buying from Amazon.

Shopify launched the Shop app in 2020, with consumers at first using it primarily as a way to track packages. This year has expanded how merchants and consumers can use the app, and created incentives and promotions to increase the use of the app and Shop Pay, its payment platform.

On June 2, Shopify held its first Shop Day, and unveiled Shop Cash, a loyalty program that gives consumers 1% back on purchases made through Shop Pay. Those cash-back credits can be stored on the Shop app and used for future Shop Pay purchases.

For the first Shop Day, Shopify merchants also offered bonus incentives in the form of price deals, or extra Shop Cash.

While Shopify declined to reveal how much was spent in the app on Shop Day, a company spokesperson said via email that the app reached its highest first-time buyer record for 2023 on Shop Day, and that it broke its offers redeemed record, coming in at five times its daily average in that category.

The 1% Shop Cash credit comes from the money Shopify makes processing Shop Pay transactions. Shopify pledged to give away more than $1 million in Shop Cash on Shop Day.

The positive response to the first Shop Day was "overwhelming," Shopify's Vice President of Product, Shop and Merchant Services, Carl Rivera, said in an interview. "We could not have expected it to go the way it did," he said. Sales in the app exceeded Black Friday-Cyber Monday sales made with the app by 30%, he said.

"That speaks to the fact that buyers are hungry for new, engaging, shopping experiences, and that we're really on to something with Shop Cash and the Shop app coming together to create this new type of mobile shopping experience," Rivera said.

"We want to become the most amazing way to shop from your phone, based on the insight that shopping from your phone happens everywhere, whether you go to an online store, to a social network, or even a retail store," he said. "Your phone is the one consistent part of every shopping experience."

The Shop app was designed as a tool for Shopify merchants, and a way to enable them to do mobile commerce without the expense and effort of creating their own mobile app. Now, as Shopify is working on making the app more useful to consumers, the goal is to give merchants access to new customers, and better ways to convert them to loyal, repeat buyers.

When Shopify announced the Shop Day event, Harley Finkelstein, President of Shopify, called the day, and the launch of Shop Cash, a "coming of age moment" for the Shop app.

The Shop app, Finkelstein said, "allows shoppers to discover great brands, check out with one tap, and track orders in real time." Shop Cash, he said, "represents the next evolution of Shop, connecting independent brands to more shoppers and rewarding those shoppers for being loyal fans."

Over 100 million buyers have signed up for Shop and 10s of millions use the app on a typical month, ... More according to Shopify.

Shopify

In a conference call with analysts in May, to discuss Shopify's first quarter results, Finkelstein emphasized that expanding and updating the Shop App is a top priority for the company, noting that in February it announced some of the biggest updates ever to the app.

"Shop gives merchants an out-of-the-box mobile storefront," Finkelstein said in the call.

According to Shopify statistics, users of the app spend more and are more likely to buy again, with 34% of orders on the app being repeat orders.

Research on Shop Pay use showed that Shop Pay, which enables one click checkout, can lift conversion rates for merchants by as much as 50% compared to guest checkout, according to Shopify.

Shopify believes it has an edge in attracting merchants to its platform and app because the app lets them create a unique store presence, and to form and maintain their own first-party relationship with shoppers, rather than let the marketplace, for example, Amazon or Walmart WMT , control that relationship.

For consumers the goal is to have more of them view the Shop app as a place where they can get customized, curated recommendations and offers, and keep track of all online purchases in one place.

As customers use Shop Pay in a retail store, or online, the Shop app will be able to send then updates from a brand, or alerts when an item has dropped in price, Rivera said. The merchants, in turn, gain new ways to connect with customers.

"It becomes this 360, end-to-end marketing suite for our merchants to engage a buyer," Rivera said, "and build a relationship with that buyer over time."

Shop Day, which Shopify hopes to repeat annually, was held of the 17th birthday of Shopify, which started as a software company to help small businesses do e-commerce and has grown into a leading commerce platform used by millions of businesses of all sizes, in 175 countries.

Shopify became one of the fastest growing companies during the pandemic, as more and more commerce shifted to online. Its gross merchandise volume (total sales handled on the platform) rose 12% in 2022, to $197.2 billion. Shopify's revenue rose 21% in 2022, following spikes of 85% in 2020 and 57% in 2021.

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