The global e-commerce industry is seeing more maturity as dollar funding to private companies flows to later-stage startups, and growth tapers off.
In 2016 year-to-date (through 6/13/16) private e-commerce companies have received close to $4.1B in funding, which puts the year on track for the lowest amount of dollar funding since 2013 and well off the peak in 2015 of over $15.6B.
Deal count, however, would total roughly 850 at the current run-rate, compared to 915 in 2015.
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).
Annual e-commerce trends
E-commerce deals grew 18% in 2015 to peak at 915 deals worth over $15.6B. A $2.8B growth equity investment into China Internet Plus Holding — a company formed by the 2015 merger of Meituan and Dianping — inflated the 2015 funding total, though dollar funding would still have peaked in 2015 without that deal. The year’s largest deals also included a $1B Series E to South Korea-based Coupang and a $550M Series I round to India’s Flipkart.
This year, China Internet Plus Holdings has also raised the largest round to date with a $500M growth equity round.
Quarterly e-commerce trends
While deal count dropped in Q4’15 to its lowest since Q3’14, we observed a slight bounce in Q1’16. Q1’16 attracted 237 deals, for the second-highest quarterly count. The industry has seen six straight quarters of 200+ deals.
Deal share by stage
E-commerce deal share reveals a gradual shift in deals toward more mature private companies.
Deal share for seed/angel companies has moved from a peak of 53% of deals in 2013 to 42% in 2015 and 45% in 2016 year-to-date. Meanwhile, deals to later-stage companies (Series D and Series E+) saw an increase of deal share from a 5% share to 8%.
The “other” category, which includes convertible notes and corporate minority rounds, grew from 15% to 21%.
Dollar share by stage
Dollar share reveals the same trend of more mature companies taking more investment. The proportion of global e-commerce dollars going to Series E+ companies has increased significantly since 2012, from 23% to 41%. India’s Flipkart raised seven Series E+ rounds between 2013-2015 (six of which were mega-rounds), contributing to the trend.
Most well-funded companies
The list of the most well-funded, venture capital-backed e-commerce startups include several Amazon-style online retailers, such as India’s Flipkart and Snapdeal, South Korea’s Coupang, and US-based Jet.com.
We also see a daily deals and coupon site (LivingSocial), a sports-merchandising platform (Fanatics), a social shopping site (Wish), a Chinese online clothing retailer (VANCL), a Chinese used car auction site (Uxin Pai), and a Chinese classifieds platform (Baixing).
|Company||Total Disclosed Funding||Select Investors|
|Flipkart||$3.2B||Tiger Global Management, Iconiq Capital, Naspers, Morgan Stanley|
|Snapdeal||$1.7B||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|
|Jet.com||$725M||NEA, Bain Capital Ventures, Alibaba Group, Accel Partners, Google Ventures, Goldman Sachs|
|Fanatics||$695M||Alibaba Group, Andreessen Horowitz, eBay|
|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|
|Baixing||$426M||Benchmark, Shenzhen Capital Group|
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