Boulder, Colo.-based Backbone, a SaaS company that helps direct-to-consumer (D2C) brands get products to market, has raised $10 million as part of an ongoing Series A round. With the latest funding, Backbone will close out the Series A with a total of $18 million in financing.
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Over the past several months, Backbone used some of the money raised to expand into consumer goods industries such as fashion, furniture, home goods and textiles. It says it has over 150 customers including Warby Parker (glasses), Allbirds (shoes), and Serena & Lily (furniture and other household items).
Last month, Backbone launched a new cloud-based platform aimed at fashion and retail verticals, market areas that have traditionally “been slow to embrace the digital age” according to the company.
Backbone describes itself as a product lifecycle management (PLM) company, meaning it works to help companies manage from idea through production. It claims to improve, for example, “cross-functional visibility and increase speed to market while decreasing revision cycles and waste.”
For D2C brands, operating in a more-competitive and crowded space than ever, shaving costs and time while bringing new products to market would be a boon; the cost of acquiring customers for D2C brands has risen, for example, as well-worn engagement channels have become overstuffed, and thus more expensive.
Cost control is therefore likely paramount for brands trying to eke margins from everyday goods.
In a press release, Backbone said it plans to use the new capital to boost hiring, and improve upon its core product via “updated features and functionality.” That boilerplate aside (every startup hires and works on product after a raise), the company did add that it intends to hire a COO by the end of the year. More generally, the company has a goal of doubling its employee count from 50 today to over 100 by the second quarter of 2020. (Or, it will hire 50 people, net, in about 12 months.) We reached out to get some insight on how much Backbone is growing revenue-wise and will update the piece when they get back to us.
The retail SaaS space is one that is becoming increasingly attractive to investors. Earlier this year, we wrote about how Retail Zipline, which describes itself as “Slack for Stores,” raised a $9.6 million Series A that was led by Emergence Capital and included participation from Serena Ventures.[Footnote]Emergence is an investor in our parent company, Crunchbase. For more on how we handle conflicts of interest, please read the Crunchbase News about page.[/footnote]
Backbone sits in between a number of notable trends. The rise of D2C companies is well-known by now, as anyone who uses Instagram or YouTube can attest. At the same time, vertical SaaS — software aimed at a particular market category, say, retail– is also on the rise. Therefore Backbone is riding two waves at the same time.
If it can hire as it hopes, and build product at the pace it expects, Backbone could have a bright future. However, as clouds rise on the horizon as the global economy rocks amidst riding trade tensions, can D2C brands survive a downturn? And what impact would such a downturn have on Backbone?
Illustration: Li-Anne Dias