With a 30 million Series C, Gorgias’ value increases to 710 million

Gorgias, a company that makes solutions to help e-commerce businesses better serve their customers, has secured 30 million in a Series C funding round, bringing its total funding to date to 70 million.

Former investors Jason Lemkin of SaaStr, Rajeev Dham of Sapphire Ventures, CRV, and Alven, and lead investors Transpose Platform and Shopify, participated in the round.

The firm, which has raised a total of 72.4 million to date since we last highlighted it a few years ago, has been in the spotlight for quite some time. The firm had a 305 million value and secured 25 million in Series B investment by late 2020. Co-founder and current CEO of Gorgias, Romain Lapeyre, said the firm was valued at 680 million before this round.

Its system, which aggregates customers’ various means of contacting online merchants into a single feed for each, was already in use by more than 4,500 retailers at the time of the Series B funding round. This allows for a wide variety of channels to be used for handling support requests, such as real-time chat, email, phone, SMS, messaging applications, and even social media.

Six years later, the firm helps more than 10,000 online retailers sell their wares using platforms including Shopify, BigCommerce, and Adobe Commerce.

With 245 workers in San Francisco, Paris, Toronto, New York City, Sydney, Belgrade, and Charlotte, it is one of the fastest growing IT companies in the world.

According to Lapeyre, “which is wearing that playbook thin,” advertising expenses on platforms like Facebook and Google have increased by as much as five times in the last year.

Direct-to-consumer firms are “feeling the margin compression at both ends,” he said, citing rising raw material costs and ongoing problems with the supply chain.

As an alternative, he thinks that “DTC brands need to earn more money from their current clients” by focusing on enhancing the quality of the customer service they provide. By providing a DTC growth roadmap, Gorgias helps its e-commerce clients increase their profits by 44%, according to Lapeyre’s calculations.

On the other hand, since its Series B, Lapeyre claims Gorgias’s staff has grown by more than 50%. It has quadrupled its client base, now serving over 10,000 e-commerce sites with 245 workers, and has seen a corresponding increase in its yearly recurring income, as well as its value.

When asked to elaborate, he said, “The environment we’re working in has altered quite a bit.” While the e-commerce boom of 2020 that aided our expansion up to Series B has died down, the need of providing a superior shopping experience for online consumers has never been higher. Customer experience is at the centre of companies’ efforts to increase income from current customers in light of declining margins and rising acquisition expenses.

The firm is nevertheless keeping an eye on its cash burn rate in light of the current economic climate, despite its rapid expansion. In the beginning, the firm wanted to “recruit and develop in a sustainable manner,” as stated by Lapeyre. “slowed down recruiting on the go-to-market side, examined where we can reduce expenses, and challenged the team to be cautious about how we spend the capital we have on hand,” though.

Lapeyre claims that Gorgias leaped at the chance to partner with Transpose Platform and Shopify, despite the fact that he hadn’t planned to seek fresh venture funding so soon.

The additional capital will be used to hasten the creation of the company’s Automation Add-on, which may divert as much as a third of recurrent support requests by giving clients with immediate solutions. Revenue Add-on, a new tool under development, will pinpoint clients that might bring in more cash through digital support.

“Both the automation and ticket prioritization will further merchant revenue goals by better identifying shoppers who are ready to buy and by increasing conversion rates through proactive support — an innovation in the current helpdesk market,” Lapeyre added. “This is made possible by the volume of e-commerce-specific support tickets handled by the Gorgias platform, which are used to train the company’s proprietary algorithms to detect intent and auto-tag appropriately.”