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Why We Started Pipe17

Mo Afshar Headshot

I am so happy to share with all of you that Pipe17, the company Dave Shaffer and I founded a little over a year ago, has closed on an $8M round of funding. The round was led by GLP Capital Partners with participation from a number of strategic investors. It’s an important milestone in many ways because not only did we convince investors to put money into the company, we convinced ourselves that there is tremendous opportunity to fix a really terrible situation for the e-commerce merchants that we serve.

First a bit on our investors. GLP Capital Partners are global investors that I have gotten to know over the last 4 years. They are one of the world’s largest investors in logistics infrastructure including technology. I am grateful to have them as investors. They know the e-commerce world very well. In addition, we are also fortunate to have a set of outstanding current and former C-level leaders from companies like Amazon, Shopify, Salesforce and Allbirds that will lend us their wisdom on our journey. 

History is clear: the best time to start a new venture is in times of crisis. But in our case it was accidental. Little did Dave Shaffer and I know in October of 2019, when we founded the company, that we were facing a global crisis that will forever change how we work, live and play. 

And true to form, the crisis of the pandemic has created a massive opportunity. According to McKinsey, in the last 12 months, growth in e-commerce has accelerated by 10 years. In other words, in just 12 months there has been a generational shift in customer behavior.

Like a giant wave moving over the water, the impact from this shift is moving from massive e-commerce growth to massive stress on the part of the business responsible for making sure customers get what they ordered and paid for as quickly, cheaply and securely as possible – what we refer to as “e-commerce operations” – the very area we decided to focus on when we founded Pipe17!

Over the last eighteen months, we spoke with hundreds of e-commerce businesses of all sizes. The tales of pain they told us were like nothing we had ever heard before. The CEO of a popular Direct to Consumer lifestyle brand, practically in tears about the broken state of his e-commerce operations. He had lost a year of growth. Another DTC merchant needed to double up on staff to put things back in order after every flash sale. It was clear that these businesses were experiencing a lot of pain.

The opportunity for merchants to get in front of many millions of potential customers is getting easier all the time. Just in Q1 of 2021, I counted 4 announcements for new marketplaces.

But with each selling channel a business adds additional complexity around managing all the aspects of their operation – orders, inventory, products, fulfillments and so forth. What makes things more challenging is that, for modern e-commerce merchants, their operation consists entirely of a growing collection of SaaS platforms – Shopify and others on the sales side, marketplaces like Amazon and Walmart, 3PLs, ERPs, Shipping, Returns, etc., with more showing up all the time. 

This collection of platforms creates a new problem for e-commerce merchants – a communications problem. It is essential that these platforms talk to each other, sharing data back and forth to support their business. Today for millions of e-commerce merchants, this communication between systems is done mostly using crude tools like spreadsheets, documents, emails… and as we explored this reality, it became clear that this was the source of a great deal of pain.  

While there are integration platforms in the market that promise to address this, they fail in large part because they are hopelessly technical and since they do not focus on e-commerce, offer limited value to merchants beyond moving data back and forth. We knew that there was so much more that could be done here by focusing 100% on e-commerce.

The opportunity for Pipe17 is to be the leading provider of services that e-commerce merchants use to enable this communication at any scale with resiliency, security and reliability so they may fully automate their operations and grow. 

Dave and I had conviction from day one that the solution was not going to be another application — there are already many great options out there –  but rather giving e-commerce merchants the power to connect their applications and form automated workflows that align to how they want to run their business at any point in time.  

As it turns out, we are not alone in this view of the world. As we are now seeing with companies like Plaid in Fintech and Segment in CRM, this phenomenon we call connected infrastructure is an important trend. It gives users of any size the ability to automate and scale out key business processes, by simply better leveraging the software they already have.  

Underlying Pipe17’s mission are a few simple principles. By focusing our work entirely on e-commerce, we can build a solution that can do much more for merchants and also be much easier to use. Additionally we want to help our customers leverage the systems they use today — including their ERP, if they have one — so our approach is designed to bridge the gaps between systems so that whether you are running on a few systems and spreadsheets or an ERP – Pipe17 is what makes your operations run! 

Both Dave and I are fortunate to have some of the best folks in the industry join us on this journey – the Pipe17 team is an incredible, committed and driven team! 

We are grateful for the opportunity to be able to fulfill our mission and enable the millions of online sellers to drive greater efficiencies in their business, increase sales, improve margins and achieve greater heights of success. Thank you Pipe17 customers for entrusting us with your business.

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