Companies are looking for steady monthly revenue and more personalized relationships with their customers, while consumers want to purchase their favorite products in their own ways. Many brands have turned to subscription models to do so, and for those needing assistance getting started, ReCharge wants to be their tool of choice.
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The Santa Monica, California-based subscription e-commerce company announced $277 million in growth capital Thursday to value the company at $2.1 billion.
The company was bootstrapped until 2019, ReCharge co-founder and CEO Oisin O’Connor told Crunchbase News. He did not disclose total fundraising for the company, but did say it received previous funding in 2020. Backing the company in this round were Summit Partners, ICONIQ Growth and Bain Capital Ventures.
ReCharge was founded in 2014 to solve a recurring payments problem that Shopify merchants were having, O’Connor said. He was sure what to initially build, so he and co-founder Mike Flynn ran a Shopify store and ended up building six different products before settling on the subscription product.
“When we started six years ago, subscriptions were a crazy idea,” O’Connor said. “Amazon came out with its ‘subscribe and save’ at a time when there was a rise in direct-to-consumer as a way to increase long-term value — if you have an ongoing relationship with customers, you can make more money and offer discounts with the understanding of what the revenue stream looks like.”
Merchants are using ReCharge to turn one-time purchasers into loyal customers. They can enable their consumers to choose the frequency of their purchases, and manage their subscriptions and how they want to be alerted of their next shipment.
Today, the company is behind subscription services for 15,000 merchants and 20 million subscribers worldwide. O’Connor intends to use the new funding to heavily grow ReCharge’s product and innovation, as well as functionality and meeting merchants wherever they may be, he said.
He also expects to double the size of the organization in the next year from an employee base of 328 people. Meanwhile, the company has doubled or tripled in size every year since it was founded.
“We have always been a product-led company,” O’Connor added. “Going forward, we will continue to look at what customers need and how to provide better toolsets for them to help their consumers manage subscriptions, as well as how to analyze data to drive more value to merchants.”
Meanwhile, Yoonkee Sull, partner at ICONIQ Growth, said his firm is active in commerce and also spent time thinking about the Shopify model. He heard about ReCharge from customers who enjoyed using it and found that it was not only a top provider for subscription tools for e-commerce, but also a top app in the commerce ecosystem, he said.
He sees ReCharge enabling subscriptions to be done in a flexible way, while merchants can also be constantly talking to their customers.
“Secular trends in subscriptions are strong and will grow in the coming years,” Sull added. “In serving that need, Oisin and Mike are special founders — they are product obsessed, and are building something best-in-category. They’ve been able to scale with the largest of brands and their core structure is sticky. Being bootstrapped for years, they’ve seen amazing growth so when you take into account an attractive market with tailwinds, and founders who focus on product, it is an amazing combination.”
Illustration: Li-Anne Dias
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