- A group of startups are raising VC funds to bring "headless commerce" into the mainstream.
- Headless commerce refers to a tech infrastructure that separates the front and back ends.
- Here are the major players in the space.
While "headless commerce" isn't entirely new to retail, a growing number of startups are doubling down on the concept as they look to empower online brands to build more flexible tech.
Headless commerce refers to the idea that a website's consumer-facing appearance can be divorced from its back-end code. The two layers then talk to each other using application programming interfaces, or APIs.
Separating the two layers makes it easier for business owners to customize their storefronts for different distribution channels, including their mobile app, desktop site, and even virtual assistants like Amazon's Alexa.
Amazon has long used a headless approach to develop its own services. But startups like Fabric, Shogun, and Commerce Layer are raising large amounts of venture capital to make headless commerce accessible to brands that don't have Amazon's vast tech resources.
The headless framework for e-commerce is becoming especially important as more shoppers move online and buy things from their favorite brands in new ways.
"It's a new standard of building e-commerce that is going to stay," Commerce Layer cofounder and CEO Filippo Conforti told Insider. "Brands that won't make a shift from a monolithic platform to a decoupled architecture in the next couple of years will put their own businesses at risk."
Here are some of the major players in the headless-commerce space:
Commercetools
Total funding: $308 million
Commercetools, based in Germany, also has offices in the Netherlands, the UK, Singapore, and Durham, North Carolina.
Its customers include Audi, Carhartt Work in Progress, Danone, and Ulta Beauty.
It has raised more than $308 million in venture capital from investors including Accel, Insight Partners, and Rewe Group since its launch 15 years ago.
Its most recent round was a $140 million Series C announced on September 13. It will use the new funding to expand its reach in North America, Europe, and Asia.
"We are singularly focused on providing all the tools and building blocks our customers need to deliver outstanding shopping experiences and innovation to consumers," founder and CEO Dirk Hoerig said in a press release. "This latest funding round will further accelerate our growth towards this target."
Fabric
Total funding: $153 million
Fabric is a headless-commerce platform that positions itself as a solution for merchants who have outgrown Shopify Plus.
Fabric's ideal customer is a merchant with a business that generates more than $20 million in gross merchandise volume, CEO Faisal Masud told Insider. Its clients include GNC, Restoration Hardware, and BarkBox.
Prospective clients need "more custom experiences for their customers — a differentiated experience that allows them to have the flexibility and scalability of being able to do what they want and not be inside more of a cookie-cutter environment" like Shopify Plus, CEO Faisal Masud told Insider.
Fabric has raised $153 million in venture capital from investors including Stripes, Norwest Venture Partners, Redpoint Ventures, and Sierra Ventures. Its most recent round of funding was a $100 million Series B announced on July 20.
Fabric also recently hired Tyler Nemiro, a former Shopify Plus executive, as its vice president of enterprise sales.
Shogun
Total funding: $114.5 million
Shogun CEO and cofounder Finbarr Taylor says headless commerce has become "critical" in an era when e-commerce shops are fighting for customers' attention.
"By using specialized technology to power their site's front end — versus the tech used to power the back end, like Shopify or BigCommerce — brands don't need to compromise anymore," Taylor said. "They can finally have unparalleled site speed, more conversions, and gain full control over how the customer experiences the brand's digital storefront."
Shogun has raised more than $114 million from investors including Insight Partners, Accel, and Initialized Capital.
Taylor said Shogun's customers include the razor brand OneBlade, the mattress brand Zinus, and the lifestyle-products brand Nomad.
Nacelle
Total funding: $72.8 million
Nacelle's headless solution can be used in conjunction with digital commerce platforms like Salesforce Commerce Cloud, Shopify Plus, BigCommerce, or Magento, according to Ron Pereira, the company's senior vice president of product marketing.
Its clients include the cosmetics brand Ilia Beauty and the silicone-ring brand Enso Rings.
The goal for its clients is to use the company's software products to "improve their online stores, make their developers more productive, and accelerate innovation," Pereira told Insider.
"In the future, innovative e-commerce leaders will continue to leverage a modular approach to differentiate experiences," he added.
Nacelle's investors include Tiger Global, which invested $50 million in a Series B announced last month, as well as Inovia Capital, Index Ventures, and Accomplice.
Chord
Total funding: $25 million
Formerly known as the direct-to-consumer holding company Arfa, Chord announced a rebrand earlier this year under a new mission: to focus solely on its tech offering, rather than launching brands.
The company was founded by two former Glossier execs: Henry Davis, formerly Glossier's president and chief operating officer, and Bryan Mahoney, Glossier's previous chief technology officer.
Melissa Pegus, Chord's chief revenue officer, told Insider that the e-commerce demand brought about by the pandemic had made the shift to headless commerce more urgent.
"You can alter or personalize the customer-facing front end, without causing a headache to the IT team coordinating the back-end operations — a truly omnichannel experience without the need to re-architect," Pegus told Insider.
She added, "Headless solutions provide business owners with the freedom and ability to stay ahead of the curve and position their company for optimal growth and development."
Chord's customers include the cookware brand Caraway, the women's personal-care brand State of Menopause, and the sweat-products brand Hiki.
Commerce Layer
Total funding: $22 million
Commerce Layer cofounder and CEO Filippo Conforti says that headless commerce is here to stay.
"Brands that won't make a shift from a monolithic platform to a decoupled architecture in the next couple of years will put their own businesses at risk," he told Insider.
"The reason is that their competitors will likely make that switch, gaining an order of magnitude in terms of flexibility, speed, and scalability."
Commerce Layer has created online-store experiences for the Italian menswear brand Brioni and the water-bottle brand Chilly's, among others. Similar to Fabric, many of its target clients are brands that have outgrown Shopify Plus, Conforti said.
Commerce Layer has raised $22 million in venture capital, including a $16 million Series B in May. Its investors include Coatue Management, Benchmark, and Mango Capital.
Swell
Total funding: $3.4 million
Swell says that headless commerce is the next step forward for a part of the e-commerce industry that has been defined by Shopify, BigCommerce, and Magento.
While those platforms have played a large role in enabling entrepreneurship online, "their architectures haven't changed since the late 2000s," Swell CEO Eric Ingram said to Insider.
"A big part of what makes Swell a game changer is the ability to customize the API itself," Ingram said. "Users can add custom fields to standard models, create new links and interactions, and create totally new models, eliminating the need for many external systems."
Swell, which has raised $3.4 million, has received funding from investors like Bonfire Ventures' Jim Andelman, Willow Growth Partners, and former Salesforce Commerce Cloud CEO Mike Micucci.
Commerce.js
Total funding: $1.8 million
Commerce.js cofounder Andrew Underwood said the company's clients varied from small projects to businesses earning $10 million in revenue each year.
Its recent partner additions include the period-products startup Ira and the snack-delivery business Handle, which focuses on college campuses.
Headless-commerce platforms like Commerce.js make it easier for online businesses to build a custom tech stack that fits their needs — using different tech providers for payments, fulfillment, and checkout.
Shopify, on the other hand, requires that merchants install plug-ins to enable different functions, which can get unwieldy as businesses mature and get more complex, Underwood said.
"Customers' expectations around the type of experience — or the device that they're actually using to interact with the brand or the business online — is changing rapidly," he added. "The benefit of having an API-first, headless approach is that you don't have to keep up with the front-end technology."
Commerce.js has raised $1.8 million from investors, including Initialized Capital and Alumni Ventures Group.
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