Alloy Automation raises $20 million to scale its ecommerce automation technology – TechCrunch

Startups

Alloy Automation, a graduate of Y Combinator, focused on connecting various ecommerce tools, announced this morning that it has closed a $20 million Series A led by a16z. The startup characterized the financing event as lively, as opposed to the capital event in 2021, when it was more difficult for the company to secure financing.

TechCrunch covered Alloy’s starting roundup just over a year ago, when the startup raised a $4 million round against a pre- and $20 million post valuation of $16 million. In simpler terms, Alloy raised as much capital as it did a year ago.

TechCrunch spoke to co-founders Sara Ducthe CEO of Alloy, and Gregg Mojicathe company’s CTO, about the round and how their company’s pitch has been refined over the past year.

Alloy Automation’s Series A

Alloy noted that it was a bit more conservative in terms of cash burn than other companies of its size when it raised money, the co-founders said. With the venture market starting to rediscover pricing and thus spending discipline, that fact hasn’t hurt the startup’s fundraising prospects. And Alloy had a good fourth quarter, which didn’t hurt either, Du and Mojica told TechCrunch.

Why has the company raised more capital? A few reasons, according to the founders. Cash is of course always good to have more with a growing company. But almost as important to Alloy was the signal that having more capital and having a16z in the cap table made it possible. Both, the co-founders explained, helped build the company, allowing it to form partnerships. And with the cost of talent where it is today, having more total funding means Alloy can hold onto the people it needs without worrying about short-term cash management.

Alloy is applying its automation technology — a method of linking apps together to enable businesses to create automated workflows — to the e-commerce market, targeting the industry that stems from early customer demand. Today, the startup presents itself as a control panel — or e-commerce coordination operating system — for all applications.

The automation market is not small. Recall that Appian, another company in the workflow and automation space, recently sidestepped the trend among public software companies by reporting growth that investors really liked; generally it will do that by accelerating growth over a period of time. For Alloy, Appian’s recent success implies TAM’s growth, which is what founders and investors are striving for.

In an interview, Du and Mojica said ecommerce brands probably built their own tech stacks in the past. Today, on the other hand, third-party software is the norm. That shift probably creates room for what Alloy is building; the more software services an ecommerce brand uses, the more likely it will want them to integrate and complement each other.

Alloy employs just over 20 people today, but has aggressive hiring plans, as you might expect. The company loosely expects to double its workforce this year, it said.

Alloy is a somewhat neutral player in the world of e-commerce software, wanting to sit in the middle of the web instead of making all the parts itself. Given that, when TechCrunch caught up with its founding team, it came as no shock that Mojica was in Texas at a BigCommerce event. BigCommerce, a recently publicized headless ecommerce software company, shares an ethos with Alloy in that it also wants to be largely customer-agnostic. This model of openness stands in modest contrast to some other players who monetize first-party solutions for things like payments. Shopify is the obvious example of this in the e-commerce world.

It will be interesting to see how Alloy manages its neutrality while working to increase its centrality, respectively from a partner and customer perspective. The startup now certainly has the cash to get through the next four to six quarters. Let’s see how far it can go before it returns to the venture capital mines.

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