Scoop: OpenStore raises $30 million to roll up Shopify sellers
OpenStore, a Miami-based rollup of Shopify merchants, raised $30 million in Series A funding led by Khosla Ventures at around a $250 million post-money valuation, Axios has learned.
Why it matters: This is almost a backhand compliment to Amazon, suggesting that Amazon is so good at optimizing merchant relationships that there's little way for a consolidator to improve the bottom line. Shopify sellers, on the other hand, usually need to get their own customers and manage their own fulfillment.
Other investors include General Catalyst and insiders Founders Fund and Atomic. The company also has secured an undisclosed amount of debt, which it's using to help bankroll acquisitions.
Timeline: OpenStore launched an invite-only acquisition process two weeks ago, reaching out to a few thousand merchants. That will switch into a public launch within the next 10 days. At some point, OpenStore plans to launch a consumer-facing product featuring all of its Shopify merchants.
The bottom line: OpenStore shares obvious etymology and lots of DNA with Opendoor, another Keith Rabois-founded company that uses an algorithm to buy houses, sight unseen. Perhaps less obvious is its tie to Square, where Rabois was once COO, which sought to automate merchant accounts that traditionally required weeks of due diligence.