Zonos banks $69M to develop APIs for democratizing cross-border commerce

Cross-border commerce company Zonos raised $69 million in a Series A, led by Silversmith Capital Partners, to continue building its APIs that auto classify goods and calculate an accurate total landed cost on international transactions.

St. George, Utah-based Zonos is classifying the round as a minority investment that also included individual investors Eric Rea, CEO of Podium, and Aaron Skonnard, co-founder and CEO of Pluralsight. The Series A is the first outside capital Zonos has raised since it was founded in 2009, Clint Reid, founder and CEO, told TechCrunch.

As Reid explained it, “total landed cost” refers to the duties, taxes, import and shipping fees someone from another country might pay when purchasing items from the U.S. However, it is often difficult for businesses to figure out the exact cost of those fees.

Global cross-border e-commerce was estimated to be over $400 billion in 2018, but is growing at twice the rate of domestic e-commerce. This is where Zonos comes in: The company’s APIs, apps and plugins simplify cross-border sales by providing an accurate final price a consumer pays for an item on an international purchase. Businesses can choose which one or multiple shipping carriers they want to work with and even enable customers to choose at the time of purchase.

“Businesses can’t know all of a country’s laws,” Reid added. “Our mission is to create trust in global trade. If you are transparent, you bring trust. This was traditionally thought to be a shipping problem, but it is really a technology problem.”

As part of the investment Todd MacLean, managing partner at Silversmith Capital Partners, joined the Zonos board of directors. One of the things that attracted MacLean to the company was that Reid was building a company outside of Silicon Valley and disrupting global trade far from any port.

He says while looking into international commerce, he found people wound up being charged additional fees after they have already purchased the item, leading to bad customer experiences, especially when a merchant is trying to build brand loyalty.

Even if someone chooses not to purchase the item due to the fees being too high, MacLean believes the purchasing experience will be different because the pricing and shipping information was provided up front.

“Our diligence said Zonos is the only player to take the data that exists out there and make sense of it,” MacLean said. “Customers love it — we got the most impressive customer references because this demand is already out there, and they are seeing more revenue and their customers have more loyalty because it just works.”

In fact, it is common for companies to see 25% to 30% year over year increase in sales, Reid added. He went on to say that due to fees associated with shipping, it doesn’t always mean an increase in revenue for companies. There may be a small decrease, but a longer lifetime value with customers.

Going after venture capital at this time was important to Reid, who saw global trade becoming more complex as countries added new tax laws and stopped using other trade regulations. However, it was not just about getting the funding, but finding the right partner that recognizes that this problem won’t be solved in the next five years, but will need to be in it for the long haul, which Reid said he saw in Silversmith.

The new investment provides fuel for Zonos to grow in product development and go-to-market while also expanding its worldwide team into Europe and Asia Pacific. Eighteen months ago, the company had 30 employees, and now there are over 100. It also has more than 1,500 customers around the world and provides them with millions of landed cost quotes every day.

“Right now, we are the leader for APIs in cross-border e-commerce, but we need to also be the technology leader regardless of the industry,” Reid added. “We can’t just accept that we are good enough, we need to be better at doing this. We are looking at expanding into additional markets because it is more than just servicing U.S. companies, but need to be where our customers are.”

 


By Christine Hall

Vista’s $3.5B purchase of Pluralsight signals a maturing edtech market

On Monday, Pluralsight, a Utah-based startup that sells software development courses to enterprises, announced that it has been acquired by Vista for $3.5 billion.

The deal, yet to close, is one of the largest enterprise buys of the year: Vista is getting an online training company that helps retrain techies with in-demand skills through online courses in the midst of a booming edtech market. Additionally, the sector is losing one of its few publicly traded companies just two years after it debuted on the stock market.

The Pluralsight acquisition is largely a positive signal that shows the strength of edtech’s capital options as the pandemic continues.

Investors and founders told Techcrunch that the Pluralsight acquisition is largely a positive signal that shows the strength of edtech’s capital options as the pandemic continues.

“What’s happening in edtech is that capital markets are liquidating,” said Deborah Quazzo, managing partner of GSV Advisors.

Quazzo, a seed investor in Pluralsight, said the ability to move fluidly between privately held and publicly held companies is a characteristic of tech sectors with deep capital markets, which is different from edtech’s “old days, where the options to exit were very narrow.”


By Natasha Mascarenhas

Pluralsight prices its IPO at $15 per share, raising over $300M

Pluralsight priced the shares in its IPO at $15 this afternoon, above its previously set target range of between $12 and $14, and will raise as much as $357 million ahead of its public debut tomorrow morning.

Pluralsight offers software development courses, specifically ones targeting employees that are looking to advance in their careers by acquiring new skills in order to transition to higher-level roles. As knowledge workers become increasingly valuable, especially in larger enterprises with sprawling workforces, companies like Pluralsight have found a sweet spot in building tools that enable companies to help identify talent in their own workforce and train them, rather than have to aggressively search outside the company to satisfy their needs. The company has raised $310.5 million in its IPO, with underwriters having the option to purchase an additional 3.1 million shares and bring that up to $357 million.

The company is one of a continuing wave of enterprise IPOs this year, including multiple successful ones like zScalar and Dropbox — the latter of which was more of a flagship as both a hotly-anticipated one and as a company that possesses a unique business model. But nonetheless, it’s shown that there’s an appetite for enterprise startups looking to go public, which offers those companies a way to raise capital in addition to offering their employees liquidity.

Pluralsight will be another of an increasing pack of unicorns in the Utah tech scene that are on their way to going public. Founded in 2004, Pluralsight was largely bootstrapped until its first financing round in 2013 where it raised $27.5 million from Insight Venture Partners. That firm is the company’s largest shareholder, and since then Pluralsight has raised nearly $200 million in financing.

Its The company’s IPO tomorrow will once again test the appetite for fresh IPOs among public investors. Enterprise companies generally offer a more stable batch for venture portfolios, with predictable and reliable growth that eventually carries it to an IPO with varying levels of success. They’re smaller than blockbuster consumer-ish IPOs, but they are the ones that can provide a stable return for funds like IVP.


By Matthew Lynley