At Bain Capital Ventures, we spend a lot of time thinking about the future of commerce. Over the last decade, billions of venture capital dollars have been invested in companies transitioning from commerce 1.0 (brick-and-mortar retail) to commerce 2.0 (digitally native brands and online marketplaces) and back again (online startups expanding into retail). Rather than trying to pick individual winners in the commerce 2.0 world, we like to ask ourselves a fundamentally different question: What is commerce 3.0? We believe the commerce paradigm will evolve how sellers sell. We remain agnostic as to who sells what, and instead we have chosen to focus on technology that will transform the how of selling. We think we found our answer in a company we are thrilled to announce our partnership with today: Mirakl.

Founded in 2012, Mirakl’s mission is to build the technological infrastructure that powers the platform economy. Bear with us: the word “platform” is thrown around recklessly these days by VCs and entrepreneurs alike. MIT academics define platforms as “multisided digital frameworks that shape the terms on which participants interact with one another.” Put simply, Mirakl creates the digital underpinnings for buyers and sellers to interact and transact seamlessly on the web.

Mirakl is a natural extension of BCV’s e-commerce investment thesis, refined over many years of investing in leading commerce technology startups, including Flow Commerce, Attentive, and BloomReach. Our thesis is distilled into a handful of observations:

1. The vast majority of global transaction volume, particularly B2B transaction volume, is offline today

2. Over time, a greater share of global transaction volume will move online. This will happen at a different pace across various countries, industries, and product categories. Some countries (China) and product categories (books) have leapfrogged others, but e-commerce penetration is increasing across the board

3. Online platforms and marketplaces will proliferate to serve the diverse needs of buyers and sellers across countries, industries, and product categories. As an illustrative example, a consumer shopping for a Halloween costume and a car parts distributor buying bulk inventory have profoundly different commerce needs. Each use case has significant implications for user experience, customer support, check-out flow, and payments infrastructure

4. Our hypothesis is that the platform economy will not result in a single platform winner, but rather a few dominant players (Amazon, Alibaba) and a large number of smaller platforms that cater to niche verticals and use cases

5. In order to compete with behemoths like Amazon, long-tail platforms need to adopt best-in-class e-commerce infrastructure. It will make more sense for these platforms to “buy” rather than “build” this tech due to the immense development and support costs required to do so

Enter Mirakl. Based in Paris and Boston, Mirakl has developed enterprise-grade, cloud-based software to manage the process of launching an online marketplace from soup to nuts, including vendor onboarding, product catalog integration, order routing, and regulatory compliance. Countless retailers and manufacturers are looking for ways to achieve the holy grail in commerce: “endless aisle.” Adding third-party products to an online product catalog is an effective way to increase share of wallet, deepen customer loyalty, trial new product categories and expand margins — all without assuming inventory risk. Early Mirakl adopters include many notable B2C retailers, such as Walmart Mexico, Best Buy Canada, Carrefour and El Corte Ingles, as well as B2B customers like Hewlett Packard Enterprise, Toyota Material Handling and Siemens Mobility.

We are thrilled to announce that we are joining forces with Mirakl to lead its $70 million Series C funding round, bringing the company’s total funding to $100 million. We are honored to partner with founders Adrien Nussenbaum and Philippe Corrot, whose visionary leadership and deep marketplace expertise impressed us from our very first meeting. Adrien and Philippe previously built and sold Splitgames, a multi-channel marketplace for gaming products, to French consumer electronics retailer FNAC. At FNAC, they scaled the online marketplace business to 2,000 sellers and 12 million products before leaving in 2012 to found Mirakl. Mirakl quickly gained traction with B2C retailers in Western Europe. In 2015, Mirakl expanded to the US market and began to attract B2B customers across both continents.

The coming wave of B2B e-commerce

We are particularly excited about the growth opportunity we see in B2B commerce. As of 2018, only 56 percent of B2B companies had an e-commerce site, and only 11 percent had a marketplace. The vast share of B2B sales are still driven by sales reps, call centers, email and fax orders and other manual processes.

Why have B2B transactions been so slow to digitize? We believe there are four main reasons:

1. B2B transactions are more complicated than B2C transactions

2. B2B transactions are often routed through complex distribution networks

3. B2B companies (manufacturers and distributors) risk channel conflict in selling online

4. Transaction requirements vary by vertical

Largely due to this complexity, B2B sellers have been historically underserved by the commerce technology stack. Mirakl is the first company to build a turnkey solution that painstakingly addresses the unique needs of B2B sellers. Concurrently, we see signals that B2B e-commerce transaction volume is at an inflection point.

Incumbent commerce vendors, such as SAP CX (Formerly SAP Hybris), report that they are increasingly serving B2B customers. Amazon Business has grown to $10 billion in transaction volume in just three years. A recent Gartner survey stated that 49 percent of B2B companies intend to build a marketplace by 2020, a dramatic uptick from the mere 11 percent who have one today. Our bet is that Mirakl is at the right place, at the right time, with the right solution.

The bottom line? We believe Mirakl has the makings of a very special company with boundless growth opportunity in the years to come. In the words of co-founder Adrien Nussenbaum, “It’s a mirakl!” — and we couldn’t agree more.