The e-commerce sector finally heated up again in early Q3’16, with Unilver’s $1B acquisition of Dollar Shave Club – the fourth largest e-commerce deal since 2009 – and Walmart’s acquisition of Jet.com. However, prior to those two major acquisitions, deals and dollar flow to e-commerce startups had both dropped significantly in Q2, cutting short Q1’s deal rebound and marking the third consecutive quarterly decrease in funding.
We define e-commerce as companies using websites or mobile apps to sell physical goods, as well as enablement companies that build these sites and apps. We excluded companies focused on services, such as Uber, or those delivering food and groceries (see our food delivery category for trends there).
Quarterly e-commerce financing trends
E-commerce progress has been uneven on a quarterly basis. Deal count peaked in Q3’15 with 254 deals, dropped in Q4’15, recovered to 222 in Q1’16, then fell a dramatic 20% to a 2.5-year low of 179 deals in Q2’16. Dollar funding dropped even further, by 44% to just $1.6B in Q2. A $500M growth equity round to conglomerate China Internet Plus Holding (formed in 2015 by the merger of Meituan and Dianping) boosted the Q1’16 dollar amount, alongside a diverse set of eight other mega-rounds of $100M+.
In contrast, Q2’16 only saw four mega-rounds: a $340M corporate minority round to Global Fashion Group, a $147M Series E to Tokopedia, a $110M Series F to FarFetch, and a $100M Series D to BeiBei.
Annual e-commerce financing trends
Due to the Q2 fall in deals and a continued slump into Q3’16, e-commerce deals and dollars are both on track to fall below 2014 levels for full-year 2016. So far this year, e-commerce startups attracted 521 deals worth $6.37B.
Most well-funded VC-backed e-commerce startups
The list of the most well-funded, venture capital-backed e-commerce startups includes several Amazon-style online retailers, such as India’s Flipkart and Snapdeal, and South Korea’s Coupang.
It also includes a sports-merchandising platform (Fanatics), a social bargain shopping site (Wish), a Chinese online clothing retailer (VANCL), and a Chinese used car auction site (Uxin Pai). In addition, daily deals and coupon site LivingSocial still makes the list. However, its prospects have fallen over the past couple of years. The company hasn’t raised funding since 2014 and it announced a round of layoffs back in March 2016 as part of its turnaround effort.
| Company | Total Disclosed Funding | Select Investors |
|---|---|---|
| Flipkart | $3.2B | Tiger Global Management, Iconiq Capital, Naspers, Morgan Stanley |
| Snapdeal | $1.8B | Softbank, Bessemer Venture Partners, Nexus Venture Partners, eBay, BlackRock, Alibaba Group |
| Coupang | $1.4B | Rose Park Advisors, Sequoia Capital, Softbank, Greenoaks Capital Management |
| LivingSocial | $919M | Amazon, Revolution, Grotech Ventures, US Venture Partners |
| Qufenqi | $876M | BlueRun Ventures, Kunlun Worldwide, Ant Financial Services |
| Fanatics | $695M | Alibaba Group, Andreessen Horowitz, eBay |
| Global Fashion Group | $575M | Kinnevik, Rocket Internet, Tengelmann Ventures |
| Wish | $571M | GGV Capital, Legend Capital, Founders Fund |
| VANCL | $522M | IDG Capital Partners, Ceyuan Ventures, SAIF Partners, Qiming Venture Partners |
| Uxin Pai | $460M | Warburg Pincus, Tiger Global Management, Tencent, Baidu, DCM Ventures |
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