Cross-border trade can be quite challenging with the introduction of new tariffs in various markets. Today, in timely news, the London-famous startup called SWAP, which is building tools for e-commerce companies to better navigate the world of cross-border trading, is unveiling $40 million in funding to expand.
Iconiq’s growth leads the Series B round, with participation from Cherry Ventures, QED Investors, Portfolio Ventures and 9900 Capital. The funding is built on an existing footprint with UK companies, with plans to expand to the wider Europe and the US, as well as Australia and Canada.
Funds are bringing momentum to the business. So far, Swap has acquired around 500 brands as a customer. It protects its business with a platform that gives users a single location to manage logistics and delivery operations, including inventory, returns, and product recycling. These functions are usually handled in a much more fragmented way or are mishandled.
That initial traction comes from the fashion industry, with software planned to tailor the specific needs of other segments, including beauty, household products and consumer technology.
Swap CEO Sam Atkinson said he and his co-founder Zach Bailet came to the idea of building Swap on the heels of their own experiences in the online commerce world. Previously, the pair started their own business, procuring handmade goods from Africa, importing them to the UK and shipping them to buyers around the world. Their consumer brand was called slow merchandise.
“You can imagine, logistics was pretty difficult,” Atkinson said. “We bought things from Burkina Faso, beautiful handmade shawls, rugs and lampshades, and took them to the UK where we filled our orders.”
Over 18 months, as the business grew, it became more complicated to do it, he said.
“We couldn’t make it work,” he said. “But we’ve learned so much about what it takes to get our e-commerce business off the ground and the challenges of importing and shipping our products.”
The pair took away the experience and submitted it, continuing their consulting jobs at McKinsey and Deloitte, respectively, and Atkinson spent some time at Fintech Jun as head of strategy. They knew they wanted to work together again and create something. He now has more experience in building technology for businesses, and revisiting his experiences and working to revisit them was a challenge they wanted to tackle.
Interestingly, the founders knew firsthand the pain points and had a vision of how to fix them, but neither of them came from a technical background. Atkinson said the high-tech backend was developed by an Israeli team led by Oron Ben David, the startup’s vice president of engineering, and another engineering team was established in the Netherlands.
Swap cites a study that predicts global transnational markets will be worth $7.9 trillion by 2030. If this happens, you might want to avoid at least avoiding companies like SWAP (and other companies in the same space, such as Shopify) targeting small businesses that want to tap the internet and sell to more people.
In a market that has already pushed the size of $1 trillion, what this means is that if tariffs are in effect, it is likely to encourage more efforts to reduce the efficiency of reducing costs associated with sending items around the world.
“We don’t need to look too far to see the headline (pointing) the rise in protectionism. It’s clearly a very dynamic customs environment,” he said. “Trans-border supply chains and commerce are already complicated and we’re adding that now. I think software providers are very good at reducing many of these headaches.”
He said he really bought the idea of a single vendor that offers multiple logistics tools for another reason: Data.
“Placing all these solutions on one platform gives you unified data. This allows for more sophisticated operational insights over time. “And as you know, the company is growing very quickly.”