Insider Access: How Loop's CEO closed a $65M Series B the day his son was born
Loop's approach to picking VCs and handling diversity right. Facebook, Google, Twitter, and Pinterest all bet big on ecommerce. Other people like Stacks. And even drug dealers want green supply chain.
“Insider Access” is where I talk with founders and CEOs, as they share with us what actually happened and the why behind the most pivotal moments in their company’s history. Please see below for prior interviews.
This week, we get to hear directly from somebody who I’ve greatly respected since the day we first met: Jonathan Poma, the CEO and co-founder of Loop and former CEO of BVAccel.
Since you asked, we met on a cold December night hours before the inaugural 2PM dinner in New York.
He had to fly out before dinner started, so we grabbed drinks before with Web Smith and Meghan Terwilliger. Neither of he nor I were prepared for the cold on this quick trip, so we did something that I never do in these situations: went shopping.
Thirty minutes later, we were walking down SoHo in matching topcoats. Web was jealous…
A couple weeks ago, Jonathan led Loop to a successful Series B round of $65M led by CRV with participation from Shopify, Renegade Partners, FirstMark Capital, Ridge Ventures, Peterson Ventures, and Lerer Hippeau.
Loop is redefining returns and touts customers like Brooklinen, Chubbies, Madhappy, and over 700 more.
Continue to hear how he pulled this off on the same day his son was born, how he’s approaching diversity at Loop, and what this means to Columbus…
Casey Armstrong: Congrats on the massive Series B round of $65M to build the next stage of Loop. You announced it the same day as you welcomed your second born and first son into the world. Please describe that day.
Jonathan Poma: Goodness. So, I don't much believe in coincidences, but let me just walk you through some of the backstory:
Shopify IPO'd on my 30th birthday in 2015
We raised our Series A from FirstMark and with Amish Jani joining our board, and FMC and Amish co-led Shopify's A in 2010
We took our first Series B investor meeting on my birthday
We signed our Series B term sheet on my wife's birthday
My son was born on the day we closed our Series B.
Just...fascinating to see all that come to life.
But to your question...describe that day. Here goes:
My wife was a week past her due date, and so we had a scheduled induction at 7:45am.
At 7:15am, we were in the car headed to the hospital and got a phone call that they hospital was full, they needed to discharge over 20 families, and that we should be able to come in later in the afternoon.
First, had we not gotten that phone call, there's no way we would have closed our Series B that day. Not a chance.
But because we got that call, I was able to come home and work to coordinate all the requisite signatures to trigger the wire releases and fund the round from all new and inside investors.
And I kid you not, within 30 minutes of having the wires initiated, we got a call from the hospital that they were ready for us and we could come in. And so we did.
And from that moment forward, and certainly looking back—the whole day was about my son.
For the fundraise, it's a fun story, and it's like it was all written into the stars, but I hardly think about having closed the round, and I'm just so grateful that the labor and delivery went smoothly, that my wife felt great, and that we got to meet our child, learn that our child was our son, and to name him after my father.
CA: Your round was led by CRV. What was most important to you in your lead investor, who also joins your board?
JP: We scored all of our investor term sheets on four criteria, and each of the criteria were weighted.
The partner (6)
The cleanliness of the terms (2)
The firm (1)
The valuation (1)
Obviously, we chose CRV, and as I'm sure you could guess by the weighting, Murat Bicer was the driver. And we looked at the partner through the lenses of:
How accretive is the person to the high-functioning board we already had
How accretive is the person's experience to the road in front of us
How founder-friendly (read: do your founder references) is the person
What was it like working with the person through the process
Murat...yeah. He's incredible. He scored well in all of those criteria. And if I had to summarize all of it: we have a great board already, and one who'd make sure we don't fail to do what we MUST. Murat is a wonderful addition who will serve as a more aggressive addition to the board who will push us to do what we CAN.
CA: Shopify also invested in your round. How did that come about and how does that shape the future of Loop?
JP: I would say...it came about...very serendipitously. I've learned over time, the best things in life happen when you surrender your expectations and you don't need anything.
I had no expectations of involvement from Shopify, and we had a great round put together anyway. And I certainly worked hard not to attach to the idea of their involvement and what it could mean for Loop.
Three years ago, there were zero billion dollar businesses built in the Shopify ecosystem. Today, there are many. And tomorrow, there will be more.
And we feel great about Shopify's commitment to the democratization of commerce and their willingness to be a platform on which billion dollar businesses can be built.
At the end of the day, as we've built our entire business focusing on the Shopify ecosystem, it feels like a moment of validation and a strong vote of confidence for where we're going. And it does so without really compromising our vision and our mission.
CA: With the recent acquisitions of Happy Returns (by PayPal) and Returnly (by Affirm), what does that mean for Loop?
JP: I'm so excited for both of those teams and the acquiring parties. They're great companies and worthy competitors.
And we've long been very confident that there was room to build a few big and meaningful businesses in the Returns space.
These acquisitions feel like they validate our space in the short term and set us up to be the enduring independent leader.
CA: I know you value a diverse workforce and are proud of your team being nearly half female and close to 20% BIPOC. What do you think that’s done for Loop and the broader ecosystem?
JP: Great question. First, I'm humbled that it's even something that you're able to recognize, so maybe it's doing more in the ecosystem than I had even known.
But first and foremost, it's strategic.
Diverse teams perform better.
The more time we spend around people who don't necessarily look like us, talk like us, think like us, and have life experiences like us, the better off we'll be. And that's a driver of the strategy at Loop.
And more than that, when the pandemic hit and George Floyd was murdered last year, we wondered what our role should be and what we could do. And I'll never forget: one of our investors said that impact happens in decades, not weeks or months or years. And he asked me what I was doing a decade ago.
And the truth was, I was an extern at a small startup, being paid $10/hour. And here I was, ten years later, the CEO of a venture-backed startup.
And he asked me: “How do you use Loop to create a trajectory like that for others?”
And so I reflected on all the things that enabled me to have the journey I've had thus far and it turns out, probably not surprisingly, that I had quite a bit of privilege and good fortune that enabled me to do this.
My parents paid for my college
I was able to live at home (with no expenses) when I had my first job
I had help paying for my wedding
My wife had a great job and was making more money than me
Those things (and so many more) enabled me to take that first job
And then even more things enabled me to start my first company, and to get to Loop.
All of that to say—at a micro-level:
I hope to be a career accelerator for some at Loop like my $10/hour externship was for me.
And I hope to create incredibly high leverage opportunities and wealth for the diverse team we have at Loop, so that they can pay it forward and build more businesses and enable more humans to change their lives.
That's the legacy I hope to leave via Loop.
CA: You are proud to be based in and running your company in Columbus, Ohio, which is actually a very large retail hub. What are the advantages of not being headquartered on the coasts and how do you see areas like Columbus evolving with ecommerce and software?
JP: With Drive Capital and the impact they've had on Columbus and the impact Covid has had on remote work, I don't believe Columbus would be much of an advantage today. And without at least the former, I don't think it'd be possible to build Loop from the ground up in Columbus.
But because of what Drive's done, and because of the great work of One Columbus and the Columbus Partnership and all of the economic development that's driven, Columbus is exploding. We're just very serendipitously in a great market, in a great time for ecommerce, and a great time for remote-first work...and we're just trying to do right by the great opportunity we've been given.
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Prior Insider Access interviews:
Dhruv Saxena, CEO of ShipBob: He’s created a 9-figure revenue business by building a global fulfillment platform that supports over 5,000 brands.
Ben Jabbawy, CEO of Privy: His company was acquired by Attentive after being down to just $1k several years prior.
Allan Fisch, Co-founder of Moonshot Brands: He raised over $160M in less than a year to build the next P&G.
Alek Koenig, CEO of Settle: He raised back-to-back rounds in less than six months from Founders Fund and Kleiner Perkins…as a first-time founder.
Adii Pienaar, Co-founder of WooCommerce, Conversio & Cogsy: He founded WooCommerce in the 2000s from South Africa and it now powers over 5M websites.
The State of Ecommerce
What’s happening in the ecosystem? Who’s up? Who’s down? Who’s building the future?
Facebook leans into ecommerce: "We're no longer a photo-sharing app. Instead, Instagram will lean into…shopping," said Adam Mosseri, the head of Instagram.
Google leans into ecommerce: Partnering with Shopify, Square, WooCommerce, GoDaddy, and ShipBob in recent months, they are trying to recapture market share. Fun fact: Google has seen searches for “discount code” jump 50% from 2020.
Twitter leans into ecommerce: Twitter launches Shop Module, which could be the future of shoppable profiles, discovering products, and actually purchasing them. If only they could connect with a partner like Square to accelerate this obvious opportunity.
Pinterest leans into ecommerce: “Creators and shopping are super-critical parts of Pinterest’s strategy and growth.” With over 450M MAUs, Pinterest’s shopping tab has attracted brands like Clinique, Estée Lauder, Fenty Beauty, Sephora, Ulta, Nordstrom, and Target.
Shopify’s bullish on NFTs: The Chicago Bulls launched its first-ever NFTs by launching an online store on Shopify. They sold out within just 90 seconds.
Gcommerce: Commerce in games and the metaverse hasn’t even made it to the ballpark, much less entered the first inning.
Experiential Commerce: Just read how Greg Isenberg says you can beat Amazon. My summary won’t justify his post. And I have only met Greg once. It was at a dinner in Laguna Beach close to a decade ago. He was telling domainer stories to me and Patrick Vlaskovits. I laughed a lot. I have no idea if he remembers it.
China Commerce: Similarly to above, my summary won’t suffice for Noah Smith’s thorough breakdown on why China is smashing their “tech industry,” but he brings up cold and hot wars.
Omni is accelerating in every direction: I am definitely seeing digitally-native brands go omni (marketplace, B&M, BOPIS) much earlier, yet there are still many later stage brands that have yet to adapt. That’s the opportunity where Adobe (aka Magento) and Walmart are trying to seize.
The Untimely Death of Quickbooks Commerce: Intuit acquired TradeGecko. Intuit sunset TradeGecko.
Stacks on Stacks on Stacks: Admittedly, I nerd out about ecommerce technology stack data, market share, and trends. Alas, I have found somebody very likeminded in Sara Du.
EcomShft: Industry veteran, Austin local, and former head of marketing of Shipstation and Cratejoy, Robert Gilbreath, founds his own company, dubbed “smart tools for modern sellers.”
Even drug dealers go green with logistics: The Spanish police seized a drone that could carry up to 150 kilos of narcotics.
Acquisitions & IPOs
Liquidity events fuel the market, drive new innovation, and create new founders with deep experience and even deeper pockets. Who’s getting acquired? And who’s going public?
Afterpay: As covered in our mid-year report card, nothing is more competitive than the payments industry in ecommerce and that heated up with Square’s latest acquisition of Afterpay for $29B.
Interesting facts: Square has added $102B to their market cap since March 2020 (6.8x). This acquisition was an all stock deal.Feedonomics: Continuing to double down on omni-selling and data, BigCommerce acquired the shopping feed platform for $145M.
APPRL: Fresh off their $46B round, Klarna acquired the Sweden-based influencer marketing platform.
Fun fact: I got to spend some time with their CEO, Martin Landén, in Finland years ago. That’s a whole nother story…Remix: Back on the recommerce train, ThredUp acquires the Bulgaria-based secondhand apparel company for $28.5M, plus $6.5M in RSUs.
Access Worldwide: Similar to the trends with omnichannel, brands are going global earlier in their company journey. With that in mind, Passport acquired the Atlanta-based international shipping consolidator, Access Worldwide, to further improve their performance, shipping rates, and transit times.
Visiture: Wpromote continues on their acquisition spree with the latest being the South Carolina-based ecommerce agency, which touts customers like Gerber, Spanx, Fathead, and Qalo.
Rent the Runway: The online clothing rental and second-hand clothes firm has confidentially filed IPO papers. Last year, they raised capital at a $750M valuation, down from their prior round with a $1B valuation.
Manscaped: The San Diego-based men’s grooming startup is said to be exploring an IPO via the Bright Lights SPAC. This would value the company at $1.4B, as they expect to close out 2021 with revenues close to $275M.
Following the Money
Who are VCs betting on to lead the future of ecommerce?
Gopuff: Fellow SoftBank-backed logistics platform raised $1B at a $15B valuation with new investors including Blackstone’s Horizons platform, Guggenheim Investments, Hedosophia, and Adage Capital. They now have 450 sites across North America and the UK, which includes more than 285 micro-fulfillment centers.
Automattic: The parent company of WooCommerce, WordPress, and Tumblr just raised $288M in funding from BlackRock, Wellington Management, Schondeld, Alta Park, Iconiq, and Aglaé, along with $250M in secondary shares valuing the company at $7.5B.
Suma Brands: The Minneapolis-based ecommerce rollup raised $150M in funding led by Pace Capital and Material to compete against Thrasio, Heyday, Perch, Moonshot, and others.
Brandless: The Utah-based DTC startup raised $118M in equity and debt led by Clarke Capital Group. It was just February 2020 when the SoftBank-backed brand shut their doors with over $240M in funding.
SODA: The Japan-based sneaker resale platform raised $56M in Series C funding and acquired rival Monokabu. SoftBank Ventures Asia led the round at a $216M valuation.
Tabby: The Dubai-based buy now, pay later payments platform raised $50M at a $300M valuation led by Global Founders Capital and STV.
Foxtrot: The Chicago-based market chain raised a $42M Series B led by Almanac Insights and Monogram Capital Partners coming off a 100% YoY jump in revenue.
Sendlane: With over 1,700 customers and $7M in ARR, the sunny San Diego-based ecommerce marketing automation platform raised a $20M Series A led by Five Elms Capital.
Global66: The Chile-based cross-border payments company raised a $12M Series A funding led by Quona Capital.
Loship: The Vietnam-based on-demand ecommerce platform raised $12M at a $100M valuation led by BAce Capital, an Ant Group-backed venture firm. The company says it has more than 70,000 drivers and 200,000 merchants, and serves about 2M customers across Vietnam.
Okendo: The Australia-based ecommerce reviews platform raised $5.3M in seed funding led by Index Ventures.
Athletic Greens: The DTC supplement brand that bootstrapped to a $100M revenue run rate raised their first round of capital led by SC.Holdings with participation from Lewis Hamilton, Hugh Jackman, Cindy Crawford, Steve Aoki, Robin Arzón, Shawn Johnson, and Tim Ferriss.
In Closing
Nowhere will you find better marketing (propaganda?), community building (cult followings?), and innovation (sometimes?) than in crypto.
For how it relates to commerce, I suggest starting with Packy and Web.
If you want one example to blow your mind, check out Solana, which is up 45x from December.
Buckle up for their video below…
Best,
Casey - Thanks for the EcomShft.com mention!