Retailers have traditionally onboarded their dropship, marketplace, and wholesale suppliers using electronic data interchange (EDI), which is a fancy way of saying information sent electronically from one company to another.
However, setting up this process can take months, time most retailers don’t have if they want to get ahead in the Amazon world.
Convictional, on the other hand, is developing what co-founders Roger Kirkness and Chris Grouchy called “supplier enablement” technology, which puts those dropship, marketplace, and wholesale suppliers at the center of the onboarding process. Instead, they connect their products and inventory to retailers using Convictional’s guided workflow and one-click integration.
This way, retailers can more easily discover and change inventory. It also allows their retailers, such as Indigo and Harry Rosen, to get up and running in just 10 days instead of three months. Moving so quickly will help retailers identify emerging brands before they hit the shelves of major retail stores, Grouchy said.
“Most corporate retailers are on-boarding third-party partner suppliers for drop-ship and may only be able to onboard three suppliers per quarter,” he added. “Convictional allows them to onboard 20 to 30 brands per quarter, which is a very different gross trade volume growth for companies.”
Kirkness, who graduated from high school at the age of 16, began his career at GNC, starting and managing the company’s e-commerce operations. It was then that he personally saw how difficult it was to connect GNC’s software to a supplier – the company bought from thousands of suppliers, but the connection process took so long that they could only get less than 100 at the time. -and-walk.
Convictional is not the only company to be successful in this area. Logicbroker, an e-commerce company focused on drop ship, marketplace and EDI, achieved a $135 million growth round from K1 Investment Management last October.
At the time, CEO Peyman Zamani told me that “electronic data exchange is now at the heart of e-commerce”, and “the concept is the same today, but what I imagined was that this would take place in the cloud, but no one was focused on the connectivity and automation in a scalable way.”
While an estimated $5 trillion is generated through EDI in a US $9 trillion B2B e-commerce market, not every business has access to EDI, explains Kirkness.
That was something he and Grouchy wanted to figure out. They met at Shopify, where they worked in a group on new markets, in this case B2B, to find out if what Shopify built would translate to that industry. That’s how they found out that the struggle to connect to EDI was due to the lack of APIs.
“APIs are the popular format for people learning computers in the web world,” Kirkness says. “We thought about creating an API for EDI, but when we spoke to customers, they wanted a way to source, onboard, integrate and trade suppliers in one system.”
That’s why they designed Convictional so that suppliers can choose their own connection path of least resistance, API or EDI, he added.
There are two customer sides to the technology: the buyer side where retailers interact with consumers and look at brands, and the seller side, the production side, where suppliers have to upload product information, receive orders and share information in order to get paid.
Meanwhile, five months after announcing $6.7 million in Series A capital, the company secured $40 million in Series B financing on Thursday, led by YC Continuity, with the participation of existing major investors, including Lachy Groom, who led the Series A and an earlier starting round and FundersClub. In total, the company has raised just under $49 million, Kirkness said.
At the time of Series A, Convicional had just closed its first business deals, but hadn’t activated them. Today, Kirkness and Grouchy say they’ve also activated five corporate clients and plan to add 20 more this year.
In addition, more than 1,000 suppliers joined the platform in 2021, increasing usage by 26% each month and increasing orders seven times faster than in 2020. The company also increased its workforce by four times.
The new funding will go towards R&D and the sales and marketing efforts to acquire new customers. Kirkness and Grouchy fulfilled the role of marketers and are now hiring across the board to replace themselves in key positions.
As part of the investment, Ali Rowghani, director of YCC, will join Convictional’s board of directors. Rowghani said he often looks for two characteristics in companies: virality and network effect, of which Convictional has both.
“I’ve known Roger and Chris for a long time, and they are strong in their vision and passion, which is the profile of a company to stand behind,” Rowghani said. “When they become a big company, a lot of people win – the sellers who can integrate into more distribution points, while buyers can expand the assortment for their customers.”