E-commerce in Europe is expected to grow 30% this year to reach $ 465 billion, resulting in a new ecosystem of services designed to meet the needs of e-commerce merchants. In the latest development, Juni, a neobank designed specifically for e-commerce businesses, closed a $ 21.5 million Series A, just 12 weeks after it officially opened.
Series A is co-directed by partners of DST Global and Felix Capital along with former backer Cherry Ventures and other early stage investors are also participating. Juni, based in Gothenburg, Sweden, had already raised a € 2million ($ 2.4million) funding round in November, when he was still only in waitlist mode.
Part of the reason the latest funding materialized so quickly is that Juni had very high usage in his three short months of life: Samir El-Sabini, Juni’s co-founder and CEO, said at TechCrunch that the startup had signed up 300 companies from a waiting list of 3,000, which represents customer growth of around 500% month over month. The customers, he said, were mainly those who sold their own inventory; dropshippers selling on behalf of retailers; and performance marketers who have branched out into product sales.
The other reason is that Juni is doing so well on both the investor and customer side, because of what he has identified and understood, and is working to fix it.
El-Sabini and his two co-founders Anders Oresdal (CTO) and Jonathan Sanders (COO) all come from backgrounds in e-commerce and fintech (in fact, one was previously at startup Pleo, which announced major funding this week; and two more worked at another expense management startup) and therefore know all too well the shortcomings of many banking services when it comes to serving businesses to do business online.
As El-Sabini described it, while traditional banks have long wooed SMEs as customers, they never really understood the dynamics, challenges and idiosyncrasies of running an e-commerce business, and this made them less responsive to the financial profiles and needs of these companies.
“What we do is provide information and knowledge about the e-commerce industry,” he said. “And we can have a low risk profile because we understand all cost centers. We understand what Taboola is, we know Shopify. El-Sabini noted that e-commerce companies typically have money spread across different services such as ad networks, payment gateways, and their banks.
“So we’re giving them a unified view of all these dashboards. Then we pull information based on all that activity to give you ‘the right number’ which means it hears a real idea of the cash flow, business inflows and outflows for all of these services so that you know how much you need to invest or use in other areas, and in particular on advertising to attract more customers.
“It’s all about the return on ad spend and cash,” El-Sabini said.
Cash also comes into play with the payment cards Juni provides as part of its service, he added.
“You need a card with high spending limits,” mainly to account for how you spend the money during the month and then pay it back on a deferred basis (due to the time it takes for income to clear payment gateways, etc.). Without the high limits, your card may be rejected when you use it to pay for marketing and advertising campaigns.
“Ad campaigns won’t work well if you get a card denial,” he said, as Google and others typically demote you in their algorithms when this happens. “My old business changed cards every quarter because we had so many drops. This, of course, is difficult to sort out and certainly not what you want to spend your time doing if you are trying to grow your ecommerce business.
And, when there is a problem, El-Sabini notes that its customer service speaks the same language as the customers, and will therefore be able to better deal with and manage their problems.
To sum up all of the above, Juni simply built the kind of bank that the founders wanted to have in their previous companies, and that resonated with others, resulting in what El-Sabini called “tremendous growth.” , financial and full of hope ”. Case in point: The press release sent to me for the story last week stated that Juni had 250 customers across Europe, but by the time we spoke the number had grown to over 300.
There is something else interesting about what Juni is doing, which points to a bigger trend in fintech that is probably worth watching as well.
Neobanks have made significant inroads into the world of finance, providing consumers with a better and more modern user experience, more personalization, and often better rates than their larger historical counterparts, and we’ve seen major developments on this front. : huge valuations, big customer growth, and now, slowly, the first of them is going public.
Today, we are witnessing the emergence of a second very strong wave of neobanks, less widely targeted and targeting more specific vertical opportunities. This could be, for example, targeting the agricultural community, the self-employed, SMEs, or in particular companies working in e-commerce, as Juni has done.
On that note, there really are a lot of fintech startups currently targeting small businesses with banking services. They include Finom, Wise, Hatch, Novo, and many more. There is even some competition specifically within e-commerce neobanks, with companies like Viva Wallet, Incard (which doesn’t appear to be launched yet), Yan, and probably more also trying to cater to the same people as Juni.
So far, he’s standing out in part because of how quickly he’s adopted and how they’ve decided to make this space their own. This will see Juni also move to a wider range of products to meet more of the needs of running an e-commerce business, such as more types of credit products to maintain cash flow, one of the reasons why historical investors like DST are interested.
“In just three months, Juni has already proven that it has the potential to become the next big tech solution for traders around the world. The product resonates strongly with their clients by solving an obvious problem and giving digital entrepreneurs time back, ”said Joseph Pizzolato and Susan Lin, investors at Felix Capital, in a joint statement. “As investors, we look for signs of ‘customer love’ and ‘digital queues’ in all of our investments, and a waiting list of over 3,000 SMEs for Juni’s product is as good as we have seen! We immediately connected with the team and strongly believe in their vision. Their attention to detail and understanding of their clients’ needs puts them in an ideal position to win this market.
“Samir, Anders, Jonathan and the team continue to amaze us,” added Sophia Bendz, Partner at Cherry Ventures. “Since the launch of Juni’s beta, they have seen an extremely impressive monthly transaction volume in such a short period of time. They have also built a world-class team in the Compliance, Finance, Technology and Marketing functions, and have fostered a deep commitment to building community and trust. They are fast becoming the go-to financial companion for e-commerce entrepreneurs around the world. This is just the start and we couldn’t be more excited to continue supporting this team.