Bonsai raises C$21M Series A for digital commerce platform
Bonsai, an e-commerce platform that connects publishers and retailers, has raised C$21 million ($16.8 million) in Series A funding, CEO Saad Siddiqui told Axios.
Why is this important: Media companies have invested in business divisions as an alternative source of revenue amid increased competition for digital ad dollars and subscriptions.
Details: Series A was led by Framework Venture Partners.
- Bonsai had already raised C$17 million ($13.6 million), bringing its total funding to C$38 million ($30.3 million).
- Siddiqui declined to disclose his annual earnings, but he said 2022 earnings are expected to be six times higher than the previous year. He also stated that current Bonsai partners generate over $3 billion in gross merchandise value.
- The Toronto-based company has approximately 90 employees and expects to double that number over the next 18 months.
Catch up fast: Bonsai began in 2016 as a shopping app that Siddiqui likened to GOAT or StockX, with related content produced in-house or syndicated by publishers.
- A few years later, Bonsai pivoted to “provide the infrastructure for publishers, who already have the traffic, have the audience, have the point of view and the brand that is so trustworthy as building our own brand,” said said Siddiqui.
- Bonsai began working with Complex Networks, one of its syndication partners, to launch its store. It has since added around 25 publishers, including BuzzFeed, Well+Good, Refinery29 and Vox Media.
- Its platform includes more than 200 merchants offering around 4 million products.
How it works: Bonsai charges customers a license fee to use the platform and takes a commission on every order placed through its in-app commerce product.
- Bonsai’s technology allows readers to check on the page where they find the product, while collecting first-party data for publishers.
- “At some level, shortening the journey from discovery to purchase is actually taking dollars away from Facebook and Google, which really excites me about what we’re building,” says Siddiqui.
The big picture: Media companies have had success developing buying teams, with staff members writing summaries or product reviews organized to earn money from affiliate fees.
- The New York Times acquired product recommendation site Wirecutter in 2016.
- BuzzFeed announced that its commercial revenue has grown from $4 million in 2016 to over $60 million in 2021.
- The Wall Street Journal launches a new business activity.
And after: Siddiqui says Bonsai expects to triple the number of publishing partners this year and expand beyond publishing.
- “Wherever a consumer finds out what products to buy where they currently can’t buy, that’s where our attention goes,” says Siddiqui.
Correction: An early version of this story identified Next Play Capital and Alumni Ventures Group as Bonsai investors based on what the company told Axios. After publication, the company said these companies were not investors.