Everstores has just raised €18 million to acquire and grow small European D2C brands at scale, creating a new asset class for the market and giving these businesses the lifeline of a viable exit. The Berlin-based startup will now launch out of stealth mode.
The D2C (direct-to-consumer) space has seen a lot of growth over the past decade. It’s an area that has evolved rapidly and is full of fresh ideas, new innovations, and is a lucrative market on the rise. It’s been seen as the future of brand building and e-commerce, bringing brands closer to their consumers and reflecting changing demands in society.
However, it’s not without its challenges with many brands and SMEs struggling with spiralling complexity and costs. This is what young startup Everstores, founded earlier this year, want to help with and they’re now ready to kickstart the adventure.
The funding
Founded in early 2022, Everstores has just closed its Seed round at an eye-catching €18 million. The financing round is led by Earlybird Venture Capital and Viola Credit with pre-Seed investor Picus Capital and top-tier angels also participating.
It’ll allow the Berlin-based team to continue the build-out of its tech platform, provide liquidity to D2C merchants, and execute its hiring plan while bringing together top talent from tech, e-commerce, and finance.
Unlocking the D2C asset class
Everstores is a next-generation investment company that acquires and scales small European-based D2C (direct-to-consumer) brands through its technology platform. The aim is to unlock the D2C asset class at scale – and bring this lucrative space to European markets.
While D2C has grown in popularity over the past decade many brands have delivered top-line growth and reached critical mass. At the same time, though, others have struggled with profitability due to rising complexity, marketing and operations costs – as well as difficulties in leveraging data and software. Most small merchants find it difficult to scale above a million euros in revenue and attract external capital to tackle challenges in a meaningful way, and are thus destined to remain in the long tail.
Despite the challenges and inherent issues in D2C, it’s still fundamentally an attractive space for brand building and financial success – and that’s not likely to change anytime soon. Shopify, for example, has its own GMV ecosystem of over €175 billion and D2C brands often enjoy +80% gross margins, able to utilize transaction-level customer data to scale meaningfully.
To consistently drive performance across D2C assets in an operationally leveraged way, Everstores is building a tech platform that employs data and software to acquire and grow small D2C brands at scale.
Kristoffer Herskind, co-founder and co-CEO at Everstores explained: “We’re convinced that technology and data, deep know-how in e-commerce across marketing and operations, and access to capital can solve a lot of these structural challenges faced by small merchants. Our vision is to unlock the D2C asset class at scale.”
Everstores likens its model to a classic operational investment fund. Only instead of targeting mature businesses and utilizing human capital as key input, Everstores focuses on the long-tail segment of D2C, leveraging data and software via its tech-enabled operating system (OS) to generate returns within the asset class.
Carlos Lopez, co-founder and co-CEO at Everstores, added: “We realized the potential of granular, transaction-level customer data to identify nascent signs of product-market fit and to further leverage this data in combination with software to drive strong performance under our ownership. We’re optimizing for data-driven, automated decision-making through a capital allocation lens.”
How it works
Everstores has built a pricing engine that can evaluate and price D2C assets quickly and accurately by leveraging ML forecasting models. Merchants can connect their Shopify store and ads data to a portal and receive a free, data-driven analysis and valuation of their businesses within hours.
Once a brand is under Everstores’ ownership, the company replaces existing operations with their OS to automate decision-making and drive consistent, superior performance. On the growth side, Everstores’ OS leverages large, proprietary datasets to identify highest paying customers across brands and targets them through profitable marketing channels. Within operations, the OS employs data analytics to forecast demand or rationalize inventory management.
Kirill Martynov, CTO and co-founder at Everstores: “We approached everything from first principles and with a fundamental belief that technology could drive better outcomes across the board. We’re excited about working at the frontier of this space, and we’re bringing together the smartest engineers and data scientists to crack these open-ended problems with us”.
What makes the Everstores proposition particularly interesting is its ability to provide entrepreneurs with a viable exit strategy – something that will encourage and foster e-commerce entrepreneurship. In an ecosystem currently characterized by a structural undersupply of liquidity, a clear exit path for smaller merchants will push many potential entrepreneurs to start building.
Tim Rehder, Partner at Earlybird: “We believe D2C is a fundamentally attractive opportunity where structural issues in the space can be solved meaningfully through data and software. Everstores’ tech platform allows for both identification of the highest-potential brands and full value capture of this potential through their OS. We’re proud to support Everstores’ founders on their mission to unlock the D2C asset class at scale through their leading tech platform.”
Sebastian Schaefer, Investor at Picus Capital: “No market solution currently provides European D2C entrepreneurs with a viable exit path. Everstores’ focus on brands outside of Amazon provides more leverage to grow the acquired businesses, and the interplay of technology and data on their platform allows for the identification of brands with strong product market fit. We have worked with the team from day one and are excited to continue supporting them on their journey.”
