- AppHub launched Thursday with $60 million in funding from Silversmith Capital Partners.
- The startup’s goal is to acquire and build third-party apps for platforms like Shopify.
- It has 20 e-commerce apps in its portfolio so far.
AppHub, a startup that builds and acquires apps developed for online sellers, launched on Thursday with $60 million in funding from Silversmith Capital Partners.
The company’s introduction comes as e-commerce growth normalizes in the wake of a boom in online spending during the pandemic. Success running an online business has also fully grown complex.
AppHub’s founders all previously founded their own startups. Co-CEO Kris Eng cofounded Tenth Avenue Commerce, a holding company that owns and operates a collection of 15 e-commerce brands. Arjun Batra, AppHub’s other Co-CEO, cofounded the lending platform Lendable. And Wilson Lee helped build the delivery platform Darkstore, which built the technology used by the ultrafast-delivery startup FastAF.
Eng told Insider AppHub’s founding teams’ past entrepreneurial experience gave them an edge when it came to working with online sellers and meeting their needs.
“It gave us a glimpse into the pain points that merchants face every day,” he said.
Eng, Batra, and Lee built third-party apps for the Shopify App Store together for several years but decided in 2021 that they could find even more success if they approached this opportunity in a more official capacity. They created the company that would come to be known as AppHub in August.
“We decided there’s a massive opportunity beyond just what we were doing if we were able to bring entrepreneurs together and be even a stronger partner to Shopify and, quite frankly, all e-commerce companies that are out there,” Eng said.
The Shopify App Store is home to more than 7,000 apps that merchants can install on their stores to help with functions like store design, product sourcing, search-engine optimization, marketing, and shipping. Shopify builds some of its own apps, but it largely relies on apps built by third parties like AppHub to populate its app store. The average Shopify merchant uses six apps to run their business, the company previously told Insider.
Many of the apps in AppHub’s portfolio are geared toward Shopify merchants, but some work with other platforms, including BigCommerce, Magento, and WooCommerce. Some apps in AppHub’s portfolio also work with online sellers that use their own custom-built websites and not a major e-commerce-software provider.
AppHub has 20 apps on its platform so far, including recent acquisitions Orderbump, a one-click upselling app, and ViralSweep, which allows merchants to offer sweepstakes and other contests to their customers. According to the company, its apps are being used by 10,000 merchants so far. AppHub plans to use its funding to continue to acquire apps and build more in-house.
‘Shopify can’t build everything’
While the rise of platforms like Shopify has made it easier than ever to launch an online store, today’s entrepreneurs have a dizzying array of problems to solve, from complex supply chains and quick delivery to customer-acquisition challenges.
For many e-commerce companies, growth has slowed as the world opens up. Shopify’s stock, for example, which reached a high of about $1,762 a share in the fall, has fallen to about $600.
“The long-term trajectory for things like e-commerce as a percentage of overall commerce is basically now back to the long-term trend line that still represents consistent growth,” Sri Rao, a general partner at Silversmith, said.
“There’s certainly some
in things like stock prices and valuations of companies that are involved in these businesses,” he added. “But we as investors are really long-term-oriented.”
AppHub’s founders and investors say there is now a large appetite for tech that can make entrepreneurs’ lives easier, given the macro trends that online sellers face.
Recently, as conversations about the relationship between developers and powerful platforms have intensified, many developers are choosing to diversify the platforms that they work with instead of going all in on Shopify. For example, developers might worry that if their apps become popular enough, Shopify may decide to build a similar tech solution in-house.
Batra said that being platform-agnostic was an advantage for AppHub in its work with merchants.
“We can react really well to what platforms are doing,” he said. “Shopify can’t build everything. We see the marketplace as quite important to what their overall strategy is. And in a sense, if we can build and provide solutions faster than they can consume, we’ll be just fine.”