Ordergroove Inc., a startup that helps online retailers sell merchandise on a subscription basis, has closed a $100 million funding round led by Primus Capital Partners.
Ordergroove announced the investment today. The New York-based startup has raised a total of $130 million since launch.
In recent years, a significant number of online retailers have started offering customers the ability to purchase items on a subscription basis. A grocery chain operator, for example, might offer a subscription that enables shoppers to have fresh produce delivered to their homes every week. Ordergroove has developed a cloud-based platform that enables retailers to more easily sell subscription offerings through their online stores.
The first task that Ordergroove promises to ease for retailers is marketing. According to the startup, its platform includes tools that can automatically promote subscription offers to a company’s online shoppers. The platform is capable of delivering promotions to shoppers while they are browsing a retailer’s online product catalog, as well as when they are in the process of making a purchase.
Ordergroove enables retailers to offer multiple types of subscriptions. Using the startup’s platform, a company can generate customized subscription offers based on data points such as a customer’s purchase history. Alternatively, retailers can enable customers to manually specify what items should be included in a subscription.
Ordergroove has equipped its platform with an artificial intelligence feature that helps retailers lower the risk of cancellations. The feature detects when consumers may decide to cancel a product subscription because they already have a sufficient supply of the product. Based on this information, Ordergroove’s AI algorithms can generate a prompt encouraging consumers to skip their next product delivery.
“With customer acquisition costs at an all-time high, recurring revenue has never been more critical to brands and retailers,” said Ordergroove founder and Chief Executive Officer Greg Alvo. “Subscriptions are hard, and Ordergroove makes it easy and delightful for both Fortune 2000 companies and emerging brands to become subscription-first.”
Ordergroove also promises to simplify several related tasks for online retailers. As part of its platform, the startup offers an analytics dashboard that makes it easier to track business metrics such as the number of customers who have purchased a subscription. A built-in supply chain optimization tool enables retailers to lower shipping costs by incorporating items that are scheduled to be delivered at the same time into the same shipment.
Ordergroove says that its platform is used by hundreds of companies including major brands such as L’Oréal S.A and PetSmart LLC. The total value of the purchases processed through the startup’s platform has increased by 59% in the past year.
Alvo wrote in a blog post today that Ordergroove will use the proceeds from its new $100 million funding round to expand its feature set. “In the coming weeks we’ll be announcing further innovations to our products and new initiatives with our partners,” Alvo detailed.