Commerce platform Bonsai raises $17 million

Bonsai, an e-commerce platform that connects publishers and retailers, has raised C$21 million ($16.8 million) in Series A funding, CEO Saad Siddiqui tells Axios.

Why it matters: Media companies have invested in commerce divisions as an alternative revenue source amid increased competition for digital ad dollars and subscriptions.

Details: The Series A was led by Framework Venture Partners.

• Bonsai had previously raised C$17 million ($13.6 million), bringing is total funding to C$38 million ($30.3 million).
• Siddiqui declined to disclose annual revenue, but he said 2022 revenue is on track to be six times higher than the year prior. He also said Bonsai's current partners drive more than $3 billion in gross merchandise value.
• The Toronto-based company has about 90 employees and plans to double that over the next 18 months.

Catch up quick: Bonsai started in 2016 as a shopping app that Siddiqui likened to GOAT or StockX, with related content produced in-house or syndicated from publishers.

• A couple years later, Bonsai pivoted to "provide the infrastructure to the publishers, who already have the traffic, have the audience, have the point of view and the brand that's so trustworthy than building our own brand," Siddiqui says.
• Bonsai began working with Complex Networks, one of its syndication partners, to launch its shop. It has since added about 25 publishers including BuzzFeed, Well+Good, Refinery29 and Vox Media.
• Its platform includes more than 200 merchants offering about 4 million products.

How it works: Bonsai charges clients a licensing fee to use the platform and takes a commission on each order made through its embedded commerce product.

• Bonsai's tech lets readers check out on the page where they find the product, while collecting first-party data for publishers.
• "At some level to shorten the journey from discovery to purchase is in effect to remove dollars away from Facebook and Google, which is what gets me really fired up about what we're building," Siddiqui says.

The big picture: Media companies have found success in growing shopping teams, with staffers who write curated roundups or reviews of products to make money from affiliate fees.

• The New York Times acquired product recommendation site Wirecutter in 2016.
• BuzzFeed reported its commerce revenue grew from $4 million in 2016 to more than $60 million in 2021.
• The Wall Street Journal is launching a new commerce business.

What's next: Siddiqui says Bonsai expects to triple the number of publishing partners this year and grow beyond publishing.

• "Anywhere a consumer discovers what products to buy where they can't currently buy, that's where our attention's shifting to," Siddiqui says.

Correction: An early version of this story identified Next Play Capital and Alumni Ventures Group as Bonsai investors based on what the company had told Axios. After publication, the company said those firms were not investors.