Fabric, a startup specializing in e-commerce platform development, raised $100 million in new funding as the pandemic puts a renewed focus on companies’ digital capabilities.
The round was led by Stripes, a New York-based private equity firm, and included new investors B Capital Group and Greycroft. Seattle-based Fabric is now valued at $850 million, according to a person familiar with the matter who asked not to be identified discussing private information. That’s up from a prior valuation of $193 million, according to data provider PitchBook.
The startup allows companies to customize their websites with digital storefronts and back-end technology to facilitate online transactions. Chief Executive Officer Faisal Masud said the coronavirus pandemic, which drove a surge in e-commerce demand, crystallized the importance of having robust digital technology, but many companies don’t have sufficient resources or engineering talent to improve their websites.
“A product owner should be focused on building their product, not running their technology platform,” Masud, the former chief operating officer of the Alphabet Inc. drone business known as Wing, said in an interview.
Fabric has more than two dozen customers, Masud said. Its client list includes GNC, Restoration Hardware and BarkBox. The latest funding will be used to hire a marketing leadership team and expand its engineering team, broaden partnerships and support possible acquisitions. The company also wants to expand in Asia.
The latest round comes about five months after its Series A financing. Other participants in the new funding include existing investors Norwest Venture Partners, Redpoint Ventures and Sierra Ventures.
While Fabric works with companies on consumer-facing websites, much of its growth is likely to come from companies fulfilling orders with other businesses, Masud said. Thirty percent of Fabric’s clients fall within this category, which is often referred to as business-to-business, or B2B.
“The digital movement will be nontrivial in B2B,” said Masud, who is also a veteran of Amazon.com Inc., eBay Inc. and Staples. “These businesses are preparing for a world post-pandemic, which means where digital was sort of tucked away in the corner, they’re now looking to bring it all online.”
Fabric was founded in 2017 by Ryan Bartley, who previously worked at Staples and eBay. At Fabric, he is the company’s chief revenue officer.
Ron Shah, a partner at Stripes, said Fabric benefits from a leadership team with experience at technology giants such as Amazon and Google. Companies in this market need that kind of expertise to stay relevant, given the rapid pace of change, he said.
“What has happened in last 18 months has made abundantly clear that if you want to survive in business you need to deliver an extraordinarily good digital experience,” Shah said in an interview. “The only way to do that is if you have modern tech to allow you to do that.”
By Jordyn Holman