Earlier than breaking apart with Shopify, Mailchimp quietly acqui-hired LemonStand, a Shopify competitor – TechCrunch

Right here’s an attention-grabbing twist on the story from final week in regards to the break-up between Shopify and Mailchimp, after the 2 stated they have been at odds over how buyer information was shared between the 2 firms. It seems that earlier than it parted methods with Shopify, Mailchimp quietly made an acquisition of LemonStand, one of many e-commerce platform’s smaller rivals, to convey extra built-in e-commerce options into its platform.

After information broke of the rift between Mailchimp and Shopify, rumors began to flow into amongst folks on the planet of e-commerce about Mailchimp shopping for Vancouver-based LemonStand, which announced on March 5 that it was shutting down its service in 90 days, on June 5, with out a lot of an reason why.

We have been tipped off on these rumors, so we contacted Ross Paul, LemonStand’s VP of progress and an investor within the startup, who prompt we contact Mailchimp. (Paul now lists Mailchimp as his employer on his LinkedIn profile.) Mailchimp confirmed the deal, describing it as an acqui-hire, with the workforce now engaged on gentle e-commerce performance.

“Mailchimp acqui-hired the workforce behind LemonStand on the finish of February,” Mailchimp stated in an announcement supplied to TechCrunch. It didn’t present any monetary phrases for the deal.

Mailchimp — which is privately held and based mostly in Atlanta — stated it made the acquisition to offer extra options to its clients, particularly these in e-commerce.

“Mailchimp helps small companies develop, and our e-commerce clients have been asking us so as to add extra performance to our platform to assist them market extra successfully,” the corporate stated in an announcement. “The LemonStand workforce helps us construct out our e-commerce gentle performance.”

However Mailchimp is obvious to say that its acqui-hire was not associated to ending its relationship with Shopify.

“Our resolution to discontinue our partnership with Shopify final week is unrelated to LemonStand,” Mailchimp stated. “Shopify knew we have been engaged on e-commerce options lengthy earlier than we employed the LemonStand workforce. In reality, we launched Shoppable Touchdown Pages final fall in partnership with Sq., and Shopify selected to not associate with us on the launch.”

However even when the LemonStand deal isn’t associated to its rift with Shopify, the acquisition of 1 and the breakup with the opposite each level to the identical factor: the rising function of Mailchimp’s e-commerce enterprise.

The corporate — which supplies e mail advertising and marketing and different advertising and marketing providers to enterprise — has been slowly constructing a income stream in e-commerce by integrating various options into its platform to let its clients, for instance, promote gadgets as a part of the advertising and marketing course of. These are much less about constructing full check-out experiences or commerce backends, however for providing, say, one-off sale gadgets as a part of a selected promotion or marketing campaign.

Final yr, when Mailchimp launched those new shoppable landing pages with Square, it stated that 50 % of its revenues have been now coming from e-commerce, with its clients promoting greater than $22 billion price of merchandise within the first half of 2018. Mailchimp made some $600 million in income in 2018, which — if its 50 % e-commerce determine remained constant — meant that it made $300 million final yr simply from e-commerce-related providers.

The Sq. partnership is instructive in gentle of this acquisition. Whereas Mailchimp is certainly constructing some native e-commerce options for its platform, it should proceed to work with third events (if not Shopify, the largest of all of them) to offer different performance.

“We consider small companies are finest served after they can select which expertise they use to run their companies, which is why we combine with greater than 150 totally different apps and platforms together with e-commerce platforms,” Mailchimp stated in its assertion to TechCrunch.

“We’re not attempting to turn into an e-commerce platform or compete instantly with firms like Shopify,” it added, “and we predict that including e-commerce options in Mailchimp will assist our e-commerce companions. Firms will be capable to begin their companies with Mailchimp and have a seamless expertise, and finally use Mailchimp together with one in every of our e-commerce companions.”

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