Exclusive: Staytuned and Zendrop agree to tie the knot
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Staytuned Digital, a developer of Shopify e-commerce tools, is merging with dropshipping platform Zendrop, the companies tell Axios exclusively.
Why it matters: With little venture funding going into DTC brands these days, e-commerce fulfillment tools like dropshipping that lower costs become more important, Staytuned CEO Serge Kassardjian says.
Zoom in: The transaction was financed with a mix of equity and cash. (Other financial terms weren’t disclosed.)
- Zendrop CEO Jared Goetz will join Staytuned’s board and Zendrop’s leadership team will remain intact.
What they’re saying: “The tools and products that Zendrop provides enables people to start businesses right away,” Kassardjian says.
- The combined company aims to be the entry point for entrepreneurs who are starting stores and could eventually “graduate” into using a suite of software, he says.
- The merged companies have a similar customer base and customer profile as well, Kassardjian adds.
By teaming up, “we can give people everything they need to succeed with their e-commerce business,” as well as take more market share from the e-commerce software space, Zendrop’s Goetz says.
- It also enables Zendrop to have access to more capital and add more services and tools to its suite, Goetz says.
Catch up fast: Zendrop raised less than $1 million in a friends-and-family round four years ago at a $15 million valuation, but it was money that it never tapped into, Goetz says.
- The company has always been profitable, he adds.
What’s next: The companies will co-market themselves and eventually New York-based Staytuned could incorporate more of Zendrop’s branding, Kassardjian says.
Between the lines: Staytuned raised $34 million in equity and debt last year to bolster M&A and software development.
- Staytuned has “a clear path to profitability” in less than a year, Kassardjian says.
Read more: https://www.axios.com/pro/retail-deals/2024/06/27/staytuned-zendrop-merger