E-commerce in Europe is expected to grow by 30% this year to $465 billion, and this gives rise to a new ecosystem of services designed to meet the needs of e-commerce merchants. In the latest development, Junea neobank specifically designed for businesses selling online, closed a Series A of $21.5 million, just 12 weeks after its official opening.
Series A is co-led by partners of DST Global and Felix Capital along with former backer Cherry Ventures and other early investors are also participating. Juni, based in Gothenburg, Sweden, had already raised a €2 million ($2.4 million) funding round in November, when it was still in waitlist mode.
Part of the reason the latest funding has materialized so quickly is that Juni has had a very high turnout over its short three months of life: Samir El-Sabini, co-founder and CEO of Juni, said to TechCrunch that the startup had signed up 300 companies on a waiting list of 3,000, representing about 500% customer growth month-over-month. Customers, he said, were primarily those selling their own inventory; dropshippers selling on behalf of retailers; and performance marketers who have turned to selling goods.
The other reason is that Juni is doing so well, both on the investor and customer side, because of what he has identified and understood, and is building to address it.
El-Sabini and his two co-founders Anders Oresdal (CTO) and Jonathan Sanders (COO) all come from work experience in e-commerce and fintech (in fact, one of them was previously at the startup Pleo, which this week announced a major fundraising; and two others worked at another expense management start-up) so they are very familiar with the shortcomings of many banking services when it comes to serving businesses in their online business.
As El-Sabini described it, while traditional banks have long courted SMEs as customers, they have never really understood the dynamics, challenges and idiosyncrasies of running an e-commerce business. which has made them less sensitive to the financial profiles and needs of these companies.
“What we do is we provide information and knowledge about the e-commerce industry,” he said. “And we can have a low risk profile because we understand all the cost centers. We understand what Taboola is, we know Shopify. El-Sabini noted that e-commerce companies usually have money spread across different services such as ad networks, payment gateways and their banks.
“So we give them a unified view of all these dashboards. Then we derive information based on all of this activity to give you “the right number”, by which he means a real idea of what the company’s cash flows, inflows and outflows are across the entire these services so that you know how much you need to invest or use in other areas, and specifically on advertising to attract more customers.
“It’s all about return on ad spend and liquidity,” El-Sabini said.
Cash also comes into play with payment cards provided by Juni as part of its service, he added.
“You need a card with high spending limits”, mainly to account for how you spend money during the month and then pay it back on a deferred basis (due to the time it takes to earn to clear payment gateways, etc.). Without the high limits, your card could be rejected when you use it to pay for marketing and advertising campaigns.
“Ad campaigns won’t work well if you get a card decline,” he said, because Google and others typically downgrade you in their algorithms when that happens. “My previous company used to change cards every quarter because we had so many rejections.” This, of course, is a pain to sort out, and it’s definitely not what you want to spend your time doing if you’re trying to grow your e-commerce business.
And, when there is a problem, El-Sabini notes that its customer service employees speak the same language as customers, so they will be able to better address and manage their issues.
To sum up all of the above, Juni simply built the kind of bank the founders wanted to have in their previous ventures, and which resonated with others, resulting in what El-Sabini called ” tremendous, financial and hopeful growth”. Example: The press release sent to me for the story last week stated that Juni had 250 customers across Europe, but by the time we spoke the number had grown to over 300.
There’s something else interesting about what Juni is doing, which points to a bigger trend in fintech that’s probably worth watching as well.
Neobanks have made significant inroads into the world of finance, providing consumers with a better and more modern user experience, more customization and often better pricing than their larger and historical counterparts, and we have seen major developments on this forehead : huge valuations, great customer growthand now, slowly, the first one two publish.
We are now witnessing the emergence of a very strong second wave of neobanks, less targeted and targeting more specific vertical opportunities. These could be something like targeting the farming communityWhere freelancersor SMEs, or more specifically companies working in e-commerce like Juni.
On that note, there really are a lot of fintech startups targeting small businesses with banking services now. They understand Finom, Wise, the hatch, New and many more. There is even some competition specifically within e-commerce neobanks, with companies like Viva Wallet, Incard (which still seems to be launched), Yanand probably more trying to cater to the same people as Juni.
So far, it stands out in part because of how quickly it’s been adopted and how they decided to own this space. This will see Juni also launch into a wider range of products to meet more of the needs of running an e-commerce business, such as more types of credit products to maintain cash flow, one of the reasons why Renowned investors like DST are interested.
“In just three months, Juni has already proven that it has the potential to become the next big technology solution for merchants around the world. The product resonates strongly with their clients by solving a clear problem and giving back time to digital entrepreneurs,” Joseph Pizzolato and Susan Lin, investors at Felix Capital, said in a joint statement. “As investors, we look for signs of ‘customer love’ and ‘digital queues’ in all of our investments, and a waiting list of over 3,000 SMEs for Juni’s product is “As good as we’ve seen! We immediately bonded with the team and strongly believe in their vision. Their attention to detail and understanding of their customers’ needs puts them in an ideal position to conquer this market.”
“Samir, Anders, Jonathan and the team continue to amaze us,” added Sophia Bendz, Partner at Cherry Ventures. “Since launching Juni’s beta, they’ve had an extremely impressive month-over-month transaction volume in such a short time. They’ve also built a world-class team across compliance functions, finance, technology and marketing, along with a deep commitment to building community and reliability. They are poised to become the go-to financial companion for e-commerce entrepreneurs globally. This is just the beginning and we couldn’t be more excited to continue supporting this team.