Here’s an fascinating twist on the story from final week concerning the break-up between Shopify and Mailchimp, after the 2 stated they had been at odds over how buyer knowledge was shared between the 2 firms. It seems that earlier than it parted methods with Shopify, Mailchimp had quietly made an acquisition of LemonStand, one of many e-commerce platform’s smaller opponents, to carry extra built-in e-commerce options into its platform.
After information broke of the rift between Mailchimp and Shopify, rumors began to flow into amongst individuals on the earth of e-commerce about Mailchimp shopping for Vancouver-based LemonStand, which had introduced on March 5 that it was shutting down its service in 90 days, on June 5, with out a lot of an reason why.
We had been tipped off on these rumors, so we contacted Ross Paul, LemonStand’s VP of development and an investor within the startup, who recommended we contact Mailchimp. (Paul now lists Mailchimp as his employer on his LinkedIn profile.) Mailchimp confirmed the deal, describing it as an acqui-hire, with the workforce now woking on gentle e-commerce performance.
“Mailchimp acqui-hired the team behind LemonStand at the end of February,” Mailchimp stated in a press release offered to TechCrunch. It didn’t present any monetary phrases for the deal.
Mailchimp — which is privately held and primarily based in Atlanta — stated it made the acquisition to supply extra options to its prospects, particularly these in e-commerce.
“Mailchimp helps small businesses grow, and our e-commerce customers have been asking us to add more functionality to our platform to help them market more effectively,” the corporate stated in a press release. “The LemonStand team is helping us build out our e-commerce light functionality.”
But Mailchimp is obvious to say that its acqui-hire was not associated to ending its relationship with Shopify.
“Our decision to discontinue our partnership with Shopify last week is unrelated to LemonStand,” Mailchimp stated. “Shopify knew we were working on e-commerce features long before we hired the LemonStand team. In fact, we launched Shoppable Landing Pages last fall in partnership with Square, and Shopify chose not to partner with us on the launch.”
But even when the LemonStand deal just isn’t associated to its rift with Shopify, the acquisition of 1 and the breakup with the opposite each level to the identical factor: the rising position of Mailchimp’s e-commerce enterprise.
The firm — which gives e-mail advertising and different advertising companies to enterprise — has been slowly constructing a income stream in e-commerce by integrating quite a lot of options into its platform to let its prospects, for instance, promote objects as a part of the advertising course of. These are much less about constructing full check-out experiences or commerce backends, however for providing, say, one-off sale objects as a part of a selected promotion or marketing campaign.
Last yr, when Mailchimp launched these new shoppable touchdown pages with Square, it stated that 50 p.c of its revenues had been now coming from e-commerce, with its prospects promoting greater than $22 billion price of merchandise within the first half of 2018. Mailchimp made some $600 million in income in 2018, which — if its 50 p.c e-commerce determine remained constant — meant that it made $300 million final yr simply from e-commerce-related companies.
The Square partnership is instructive in gentle of this acquisition. While Mailchimp is certainly constructing some native e-commerce options for its platform, it should proceed to work with third events (if not Shopify, the largest of all of them) to supply different performance.
“We believe small businesses are best served when they can choose which technology they use to run their businesses, which is why we integrate with more than 150 different apps and platforms including e-commerce platforms,” Mailchimp stated in its assertion to TechCrunch.
“We’re not trying to become an e-commerce platform or compete directly with companies like Shopify,” it added,…
