FrenchTech catches up and gets back in the Race against the American Giants

A unicorn is born. The hitherto unknown startup Mirakl has seen its value exceed $1.5 billion by the end of September 2020 thanks to a $300 million Series D fund-raising campaign. An absolute record in the history of FrenchTech.

Thanks to the trust of its investors, the scaleup has raised $300 million in funds from early venture capitalists such as Elaia Partners, Bain and Permira. This is more than Meero’s previous record of €205 million raised last year.

Already a member of the promising Next 40, Mirakl is now a member of the private club of the 10 French Licornes, which have also surpassed a billion dollars in value, among which Doctolib, OVH, Blablacar, Daitaku, Voodoo and Contentsquare.

E-commerce, a magic word in front of investors

Created in 2011 by Philippe Corrot and Adrien Nussembaum with the ambition to allow traders to compete with trade giants and acquire independence from them, the scaleup that has been active since 2012 has experienced a meteoric rise.

In 8 years, the company has become the world leader in the e-commerce strategy of distribution companies, offering a SaaS solution for marketplace and platform edition that connects sellers and buyers online.

Thanks to it, companies can expand their online product catalog to enrich their customer proposition without having to make huge investments to create a new line and distribution system (warehouses, stocks). For example, it allowed the large Carrefour group to add more than 100,000 references to its online catalog (from more than a hundred different vendors).

At a time when consumers are spoilt for choice when shopping online, this enhanced business value proposition made possible by Mirakl is a direct part of a company’s competitive strategy. With less and less possibility of differentiation based on price, the major asset becomes the richness and variety of products in the catalog.

But a large product catalog means drastically complex logistics and the need for extensive optimization. Hence the interest in e-commerce and the reliability that the sector enjoys today.

The fact that it is based on a B2B business model makes it more profitable than physical commerce and, above all, less vulnerable to competition from large platforms thanks to increased possibilities for optimization (no inventory requirements and the logistics that come with ever faster delivery requirements).

Daniel Brenhouse, principal at Permira, believes that “the growth opportunities this model represents are virtually limitless and this is true for all sectors, both B2C and B2B”.

Strategic period funding

These recent months of strong acceleration have enabled the startup to set itself more ambitious goals such as conquering and strengthening its market share in Asia, the United States and Latin America.

This fundraising comes at a pivotal time. Barely out of confinement and uncertain in the face of potential aftershocks, the time has come to place the pawns for e-commerce companies capturing more and more new customers that they must retain and secure the loyalty of their customers.

For Mirakl, it’s about growing internationally to reach more customers and improve the efficiency of its technology. Indeed, the scaleup has indicated that the funds raised will be used to accelerate its international development, innovate and invest more in its technology to meet growing market demand. But one of the most tangible effects is the recruitment of more than 1,000 employees in the coming months, including 300 engineers in France, which will quadruple its workforce.

FrencTech’s competitiveness and increased influence are the result of the political choices and directions taken in recent years, including the investment made by French President Emmanuel Macron, who very early on announced that the influence of French savoir-faire would be one of his priorities. The President personally congratulated Mirakl’s teams for this tour de force and looks forward to future job creation in Paris and Bordeaux.

In response, Mirakl seems determined to remember where it came from, and its CEO remains clear about its internationalization ambitions: “Mirakl is a French company. It will remain French”.

An unstable but favorable context

Why this dazzle in the development of Mirakl? Despite the trends of globalization and immediacy that the global consumption system has been taking for more than a decade, the business model based on e-commerce has been further boosted by the Covid-19 pandemic. While taking a commission on each sale, Mirakl has seen its business volume increase by more than 110% during containment. In the first half of 2020 alone, it won 25 new customers and launched 18 new marketplaces.

Today, the company claims to have more than 40,000 retail and industrial customers of all sizes and sectors. Among them, big names such as BestBuy, Walmart or Kroger but also Fnac, Darty, Carrefour, Leclerc, Toyotta, Boulanger or the hotel group Accord on the national territory.

Beyond e-commerce, the marketplaces are the big winners of this confinement and the consumption model that it has brought about. According to Mirakl, more than 60% of online commerce in the world passes through the Marketplaces with the effects of the pandemic.

The Covid-19 crisis and the containment that it incited have modified household consumption, constantly calling into question our economic model of the last few years. According to the Nielsen group, online purchases in France have strongly increased during the containment with 9.8% of food and mass consumption purchases made online against 5.7% in 2019.

According to the same study, one third of the 2.5 million households that have purchased online for the first time intend to continue to do so. E-commerce therefore has bright days ahead of it.

It is therefore today a clear and obvious trend that the major brands, SMEs and Marketplaces are taking into account by investing in order to maintain this dynamic.

Philippe Corrot, CEO of Mirakl is quite confident about the future: “The growth of marketplaces is undeniable, whether in terms of product offerings, price proposals, or quality of service”.

Mirakl’s CEO believes he can now compete with Amazon using Mirakl’s powerful and efficient system. The future will tell us whether the cards have been dealt and whether this kind of breakthrough is now capable of shaking a giant like Amazon. It is very likely that while the COVID-19 pandemic will not have fundamentally changed our business model, it will have greatly accelerated the emergence and realization of trends that were already emerging. The effects of this accelerated shift are still unknown to this day but will reveal the advantages and shortcomings of our current system more quickly.

At Cube, we encourage progress and a smoother, faster transition to tomorrow’s solutions by helping to make entrepreneurship more accessible, with thoughtful and optimized business models. We are now at a pivotal time where everyone is contributing and will contribute to the emergence of the post-covid-19 system.