UK-based Creoate, the online marketplace on a mission to democratise wholesale by connecting the very best global sellers with independent retailers, has raised an approx. €4.2 million seed round led by Fuel Ventures with participation from Vinted founder, Justas Janauskas.
Having seen first-hand the pain-points that surround the current wholesale ecosystem, and just how damaging these are to local businesses, Creoate’s founders Ashley Horn and Fahad Khan wanted to build a community that puts local, high-quality, sustainable products in the hands of discerning consumers worldwide. A community that’s powered by a network of independent businesses, on a platform designed to reclaim the supply chain from global giants, all underpinned by Creoate’s unique data.
The size of the seed round – which the startup states is twice the average in Europe – is validation of this vision of a post-pandemic economy built by independent businesses.
By leveraging artificial intelligence and predictive analytics, Creoate helps retailers forecast which products will fly off its virtual shelves in order to buy and manage inventory levels as efficiently as possible. Since launching in January 2020, this advanced platform is being adopted at an exponential rate despite widespread retail lockdowns, with more than 25,000 retailers having signed up in the past 6 months alone — a 1,600% year-over-year increase. Retailer adoption has increased to 7,000 a month over the last three months and is set for 6x growth by the end of the year as economies open up further.
Creoate’s team has similarly grown four-fold in the last six months to meet demand and is on track to more than double by the end of 2021. Creoate is live in 10 countries including the UK, France and Netherlands and its UK retailer network alone already consists of 4.5x more locations by door count than Boots, Marks and Spencer, and John Lewis combined.
“Sourcing brands as an independent retailer is close to impossible, an experience I went through myself when running a multi-brand retail shop in London”, said Creoate co-founder Ashley Horn. “There are over 30 million brands on Instagram and it’s getting cheaper to launch a new product, but knowing what to buy as a retailer is extremely risky, expensive and time consuming. To make matters worse, all the banks I talked to didn’t want to finance inventory so we were turning to expensive credit cards with 18-30% rates just to pay for goods. It felt like the barriers were so high for an independent business to thrive even though there was so much demand from consumers. We could see that this system was not sustainable and there had to be a better way”.
“For as long as Mom and Pop shops, like those run by my family, have existed, they have been faced with poor information, discriminatory pricing and unpredictable cash flows,” said co-founder Fahad Khan. “I saw first-hand working in financial services how little data is used today to make inventory decisions, which locks out millions of businesses from financial inclusion. That’s where we believe technology can add the most value, by empowering businesses to be more resilient and make better money. By focusing on how inventory is bought and financed, we are building an omni-channel future where offline consumer shopping brings the best out of online business-to-consumer commerce. It’s not one or the other.”
To empower its retailers, Creoate has built a suite of B2B software tools for brands and wholesalers which make them instantly wholesale ready. B2B trade is complex, yet using Creoate’s software brands and wholesalers can start selling in just three clicks, without having to rely on pen and paper or having to go through multiple layers of middlemen. Creoate’s software has helped eliminate up to 40% in middlemen costs, helping pass savings back to the community and creating more transactions than ever before.
“Unless you’re in the world of retail, it can be difficult to truly grasp just how broken the system is for the 2.5 million retailers and 30 million emerging brands that Creoate serves,” said Mark Pearson, founder and managing partner at Fuel Ventures. “We are captivated by Creoate’s technology which is inspired by the founding team’s real-world experience and empathy. Creoate’s incredible growth, despite a severely challenging economic environment is clear evidence of the must-have value it provides to independent businesses. We at Fuel Ventures only invest in super ambitious hard-working founders and companies that have large global scale potential and with Ashley and Fahad, this is exactly what we have found.”
The funding will be used to further grow key go-to-market teams, double down on traction in Europe and add more advanced tools and analytics to the platform in order to partner with even more businesses and offer even more market-leading, game changing features.