OrderBump is a powerful, one-click upsell application that helps merchants increase average order values through checkout and post-purchase cross-sells and upsells. The company was founded in 2020 and is based in New York, New York. In November 2021, OrderBump was acquired by Dennis Hegstad. The terms of the transaction were not disclosed.
Latest OrderBump News
Aug 22, 2022
Redeem now Shopify-app makers are becoming attractive acquisition targets. Deals valued at up to seven figures are being made despite difficult market conditions for tech. Similar to Amazon aggregators, companies acquiring Shopify apps want to use economies of scale. As questions mount on how sustainable the Amazon-aggregator business model is, acquisition activity is heating up in a different part of e-commerce: third-party apps on the Shopify App Store. The Shopify App Store hosts more than 7,000 apps that merchants can install on their stores to help with store design, product sourcing, search-engine optimization, marketing, and shipping. App aggregators like AppHub, Assembly, and Pantastic are raising funds with the goal of scooping up Shopify apps. Private equity is also getting involved, though specifics on those deals often don't get publicized. The acquisition interest comes as Shopify has added many thousands of merchants during the pandemic, and app developers have rushed to launch new tech to cater to their needs. The average Shopify merchant uses six apps to run its business, the company previously told Insider . Similar to what Thrasio and other Amazon aggregators have said about their own business models, Shopify app aggregators hope to use scale to optimize operations. And deals valued as high as seven figures are still happening in the space despite difficult market conditions across the tech sector. AppHub is a newer player in the app-acquisition space, launching in April with $60 million in funding from Silversmith Capital Partners. Kris Eng, its co-CEO and cofounder, said the startup saw a "massive opportunity" in bringing app founders together under one umbrella. AppHub has acquired 20 apps since August. Its most recent acquisitions include OrderBump , a one-click upselling app, and ViralSweep , which allows merchants to offer sweepstakes and other contests to their customers. AppHub plans to use its funding to continue to acquire apps and build more in-house. From left, Kris Eng, Arjun Batra, and Wilson Lee, the cofounders of AppHub. AppHub Founded in 2019, WeCommerce is a holding company that acquires makers of Shopify apps and themes, as well as Shopify-focused agencies. It, too, has been especially active lately, announcing $140 million in potential transaction value in the past 12 months. "We focus on e-commerce technology companies that help merchants start, grow, and thrive," CEO Alex Persson said. The ideal acquisition is "maniacal about product innovation and customer support," he added. These acquisition targets "can range from software companies founded by solo entrepreneurs to bootstrapped companies with hundreds of employees and tens of millions of recurring revenue," he said. WeCommerce most recently acquired KnoCommerce, a maker of post-purchase surveys for Shopify merchants, for $2.1 million in March. Persson said it's still eager to acquire more e-commerce software businesses. 'It became very clear that the apps were undervalued' Some of these companies are making acquisitions with their eyes trained directly on merchants' needs. Pantastic launched in May 2020 and has announced two Shopify-app acquisitions : Spently, a maker of email templates for Shopify merchants, and CartHook, an app that enables merchants to make one-click post-purchase offers to shoppers. CEO Scott Rafer told Insider he'd been involved in the Shopify ecosystem in various ways since 2013. "Over time, it became very clear that the apps were undervalued relative to other kinds of software," Rafer said. The idea behind Pantastic, Rafer said, is to give independent brands what he calls "superpowers" to grow their businesses the way they want to. In March, Pantastic announced an $18 million funding round led by B Capital Group and said it planned to use the funding to make more strategic acquisitions of Shopify businesses. "We are chasing a goal of economic diversity, trying to make sure our kids aren't only buying from the big guys in a few years," he said. "We think that the best thing to help with is retention and future sales to existing customers." 'It seems like the timing is right' Some app owners might want to sell their business to get access to the marketing expertise of a larger company. Teams working on Shopify apps are often very focused on more technical work, not marketing, said Thomas Smale, the founder and CEO of FE International, an advisory firm that works with owners of apps and online stores to sell their businesses. "What a lot of the firms consolidating will do is bring a level of infrastructure that a smaller business either can't afford or is not willing to invest in," Smale said. FE typically works with businesses valued at between six and eight figures, with more than half its deals coming from Shopify-related businesses, like apps, store themes, and online stores. Smale said that the focus on Shopify had grown over time. "As Shopify as a public company has grown, and that app ecosystem has grown," Smale said. "As bigger and bigger companies use Shopify to build out their e-commerce stores, then the demand for apps and enterprise level is only going to increase as well." WeCommerce's Persson said the robust ecosystem was a big part of what set Shopify apart from competing e-commerce platforms — and why it saw a lot of opportunity there. "WeCommerce has been part of the Shopify ecosystem since it was just getting started, and that partner ecosystem is a core differentiator compared to other e-commerce-infrastructure platforms," Persson said. Dennis Hegstad is an e-commerce entrepreneur who sold OrderBump, an upsell app for Shopify Plus, to AppHub in February. Hegstad didn't found OrderBump but bought it in October after selling an app he cofounded, called LiveRecover, to a private-equity firm for an eight-figure sum earlier in 2021. He wasn't looking to sell OrderBump, but the offer from AppHub was generous. With more companies with bigger checkbooks looking, there could be opportunities for founders looking to cash out, he said. "As someone who is bootstrapped and has not raised money and doesn't plan to raise money, to me, it seems like the timing is right to potentially sell your business if that's something you're interested in," he said, "especially when they're paying fair market multiples for healthy companies. " Why rolling up apps is different from buying Amazon sellers Rolling up Shopify apps mirrors the aggregation wave that took over Amazon sellers in 2020 and 2021 — and then hit a brick wall in 2022. Companies like Thrasio raised hundreds of millions of dollars in the past couple of years with the goal of rolling up Amazon sellers and using economies of scale to boost their sales. But Thrasio has faced its own struggles recently, announcing significant layoffs and its second CEO change in eight months. Some e-commerce-industry observers have begun questioning whether the Amazon-rollup business model is sustainable . Meanwhile, Shopify-seller rollups still seem appetizing to investors: OpenStore has also raised more than $100 million to quickly acquire Shopify stores using a proprietary pricing algorithm. And as mergers and acquisitions pick up in the Shopify-app space, those involved say what they're doing is very different from the Amazon-aggregator world, or even what OpenStore is doing with Shopify stores. Rafer, the CEO of Pantastic, described his company as "software people buying software companies." Smale said that acquiring Shopify apps and rolling up Amazon sellers required "different pressures and different incentives." Shopify-app owners also do not take on inventory risk as an Amazon aggregator would. "With apps, you only really need to be able to do customer support, manage Shopify as a single channel, and build out your developer team," he said. "Whereas, on the Amazon platform, you also have to deal with supply risk." Sign up for notifications from Insider! 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OrderBump Frequently Asked Questions (FAQ)
When was OrderBump founded?
OrderBump was founded in 2020.
Where is OrderBump's headquarters?
OrderBump's headquarters is located at New York.
What is OrderBump's latest funding round?
OrderBump's latest funding round is Acquired.
Who are the investors of OrderBump?
Investors of OrderBump include Dennis Hegstad.