Alloy Automation, a Y Combinator graduate focused on connecting diverse ecommerce tools, announced this morning that it has closed a $ 20 million A Series led by a16z. The startup characterized the funding event as lively, in contrast to its 2021 capital event when it was more difficult for the company to get funding.
TechCrunch covered Alloy’s seed round just over a year ago, when the startup raised a $ 4 million round with a valuation of $ 16 million pre and $ 20 million post-coin. Quite simply, Alloy has just raised as much capital as it was a year ago.
Alloy Automation A Series
Alloy noted that it was a bit more conservative in terms of consuming money than other companies of its size when it went out to raise money, the co-founders said. When the risk market begins to rediscover price – and therefore spending – discipline, this fact hasn’t damaged the startup’s fundraising prospects. And Alloy had a good fourth quarter, which didn’t hurt, Du and Mojica told TechCrunch.
Why did the company raise more capital? Some reasons, for its founders. Cash, of course, is always useful for getting more in a growing business. But almost as important to Alloy was the signal that having more capital and having a16z on his cap table offered it. Both, the co-founders explained, helped found the company, allowing it to create partnerships. And with the cost of talent where it is today, having more total funding means Alloy could capture the people it needs without worrying about short-term cash management.
Alloy applies its automation technology – a method of linking apps together to enable companies to create automated workflows – to the e-commerce market, focusing on the industry resulting from initial customer demand. Today, the startup proposes itself as a control panel – or operating system for coordinating e-commerce – between applications.
The automation market is not small. Recall that Appian, another company in the workflow and automation industry, recently thwarted the trend among public software companies to report growth that investors really liked; typically, accelerating growth over a period of time will. For Alloy, Appian’s recent success implies the growth of TAM, something founders and investors alike crave.
In an interview, Du and Mojica said that ecommerce brands are likely to build their own technology stacks in the past. Today, however, third-party software is the norm. This change likely creates space for what Alloy is building; The more software services an ecommerce brand uses, the more likely it is to want them to complement and complement each other.
The league has just over 20 people today but has aggressive hiring plans, as you’d expect. The company vaguely plans to double its staff this year, he said.
Alloy is a somewhat neutral player in the world of ecommerce software, who wants to sit in the middle of the web instead of creating all the threads himself. That said, it wasn’t a shock that when TechCrunch caught up with its founding team, Mojica was in Texas at a BigCommerce event. BigCommerce, a recently released headless ecommerce software company, shares an ethic with Alloy in that he also wants to be largely independent of customer choice. This openness model contrasts modestly with some other players making revenue from proprietary solutions for things like payments. Shopify is the obvious example of this in the ecommerce world.
It will be interesting to see how Alloy manages its neutrality as it works to increase its centrality, from a partner and customer perspective, respectively. Certainly the startup now has the money to carry out its next four or six quarters. Let’s see how far it can go before it returns to the venture capital mines.