Booming e-commerce sales have made a unicorn out of a Utah-based startup that helps companies manage their sales on Amazon.com Inc. and other digital marketplaces.
Pattern Inc., which started out selling fridge magnets and other trinkets on Amazon’s third-party marketplace, on Wednesday said it raised $225 million in new outside investment at a valuation of about $2 billion.
Founded as iServe Products in 2013, the company quickly moved beyond selling its own wares, joining the growing ranks of outfits that build software to manage and analyze online listings and operate warehouses on behalf of clients.
Online marketplace sales, once the domain of mom-and-pop inventors and scrappy importers working out of garages, has become big business in recent years. Investors frustrated by the challenge of finding the next Amazon have instead started bankrolling companies poised to benefit from the largest online retailer’s rise. Investment banks, venture firms and private-equity shops have pumped billions into so-called e-commerce aggregators, which roll up online brands and seek to boost their sales and achieve economies of scale.
Pattern occupies a related niche, serving as an advisor and sales agent for other companies. The firm now generates most of its sales by managing a portion of brands’ e-commerce sales, buying products wholesale and selling them online. Clients include Nestle SA, Panasonic Corp. and Yogi Tea Co.