Why we invested in Trendsi
Why we invested in Trendsi
The one-stop supply chain solution for e-commerce sellers
Over the last decade at Peterson Ventures, we have been active investors in e-commerce. Our interest started with the rise of DTC e-commerce with investments in brands like Allbirds, Bonobos and Cotopaxi reinventing the way a brand is built with a direct relationship to its consumer. I got to know my partner Ben and the team at Peterson Ventures during this time as a portfolio Founder when I was CEO of Weddington Way, a DTC e-commerce business that I built and scaled for 8 years (we were acquired by Gap Inc.). We took this experience next to investing in e-commerce enablement SaaS companies like Loop and Via that are solving some of the pain points of building and scaling DTC e-commerce. Today, we continue to be active investors in e-commerce enablement and, as a natural extension, B2B e-commerce.
As more of our focus has shifted to e-commerce enablement there were a few trends in e-commerce that we were following in 2020 when we connected with Ella Zhang about Trendsi:
There was a large and rapidly growing segment of small sellers in the U.S., many of whom worked part-time.
Social selling was exploding in China and India (Pinduoduo today is the 3rd largest e-commerce player in China; Meesho in India has now raised over $1B from Sequoia and others).
Dropshipping was an essential layer of the e-commerce ecosystem in China but was not as big yet in the U.S.
So, when Ella shared with us her vision for Trendsi, we saw a huge opportunity to take advantage of these trends and serve small sellers — we hadn’t yet made a bet around solving sourcing, inventory management and logistics for smaller sellers and were intrigued by the opportunity. With a prepared mind given our broader theses, as we dug in we decided to invest in Trendsi because of (1) an incredible founder and founding team, (2) a compelling “Why Now,” (3) a big vision that we bought into and (4) unique advantages we felt this team had to solve some problems that are hard to solve.
Founder & Team
Pictured: Trendsi Founder & CEO Ella Zhang and a subset of the team at Trendsi’s LA Live Selling Center (for their Pink Friday live selling event)
As a pre-product, pre-revenue company, the bet was on co-founder and CEO Ella Zhang, a formidable force who we believed we just had to back. In Ella, we saw strong founder-market fit, a charismatic leader and magnet for top talent and authenticity.
With 5 years experience operating in e-commerce, including Tencent and Google, 5 years investing in consumer tech at Kleiner Perkins in China and an MBA from Stanford, there was clear founder-market fit between Ella and the pain points she was setting out to solve (helping small sellers build and scale e-commerce businesses).
Pictured: Trendsi Founder & CEO Ella Zhang
Despite having not yet raised any capital, Ella came with an incredibly impressive team already built, a signal of Ella’s ability to sell and be a magnet for top talent, a key success factor for a great Founder CEO. We were excited about how the founders had deep experience in each of the key areas where Trendsi would need to be excellent: Ella’s co-founder Owen had 15 years experience in e-commerce operations at companies like Alibaba and Tencent, her co-founder Sherwin studied CS at Stanford and was an early PM at Lime, her co-founder Wei had experience as a CTO building e-commerce systems from scratch to scale at companies like Rakuten and her co-founder Maddie had owned and operated her own $5m GMV business reselling on Amazon.
Finally, we were inspired by Ella’s authenticity. She talked to us about her “hero Mom,” who is her source of inspiration. When Ella’s Dad lost her job when she was young, her Mom started selling insurance door-to-door to support the family and ultimately put Ella through college. Ella is super passionate about powering "mom-prenuers," who might have another job and also have a dream of running their own brand but don't have supply chain and logistics solved and therefore no way to get scale and compete with larger sellers. If they could make it viable financially for their family, they have a dream of becoming a professional seller. Ella herself is a mom of 2 young girls and is motivated to set an example for the next generation and empower other moms like her to be their own boss.
Why Now
When we invested in Trendsi in the Fall of 2020, there were a few market tailwinds we felt made it a good time to start Trendsi (in other words, there was a solid answer to “Why Now?” for Trendsi). This was about 6 months after the first Covid lockdown of the pandemic, and we believed that pandemic-induced store closures would make brands and retailers more open and interested in new selling channels. Additionally, the pandemic shifted the way people shopped, rapidly accelerating trends from brick & mortar to online, including social commerce. In 2019, social commerce sales in the United States were estimated at $19B (and they grew to an estimated $37B by 2021, still only 10% the size of social commerce in China).
Source: Link
Vision
We were bought into Ella’s vision for Trendsi: to empower anyone to easily become an online seller and build their own brand by providing them with the backend they needed to scale, including product sourcing, inventory management, shipping and logistics. We agreed with Ella that inventory and shipping/logistics was a huge barrier for small sellers and were excited about the opportunity to power the longtail of e-commerce with the critical tools to both start a business and scale it.
Unfair Advantage
Finally, different from many of the software businesses we back, there was an important physical component to Trendsi’s business, which would be to build out a robust and agile supply chain to efficiently and effectively power dropshipping for small sellers and their consumers in the U.S. The Trendsi team, we believed, had an advantage here with factory relationships in China and operating experience building and scaling e-commerce businesses in China from the ground up. They were the team to combine software and physical infrastructure to power this next generation of sellers in the U.S.
Since We Invested
Fast forward and it has been a little over 2 years since we invested in Trendsi’s Seed round. We are in awe of (but not surprised by) what this team has accomplished. Since we invested in Trendsi, they have grown new users over 10x YoY and have built an incredible team of over 100 employees. With Trendsi’s product, in just a few clicks, a seller can shop Trendsi’s curated B2B marketplace of fashion, beauty and home goods and port the products they want to sell over to their online storefront on Shopify and other platforms. When they make a sale, Trendsi takes care of all the logistics, including shipping and returns. Most importantly, Trendsi is delighting their customers, small sellers, with a 4.9 average rating on Shopify across over 1,000 reviews and they’re ranked #33 in the Shopify App store. In October 2022, Trendsi announced their Series A (Kyle Wiggers covered it on TechCrunch and Geri Stengel wrote a great in depth piece on Trendsi in Forbes). Trendsi raised $25m led by Lightspeed Ventures (check out Arsham’s post about their Trendsi investment here) with participation from Basis Set Ventures, Footwork VC and Peterson Ventures - we couldn’t imagine better partners for Trendsi.
We continue to be excited by the opportunity ahead for Trendsi. The global B2B e-commerce market is estimated to reach over $25T by 2030 as B2B purchasing continues to shift online. U.S. social commerce sales are projected to reach $80B in 2025, accounting for only 4% of U.S. retail e-commerce sales, so we believe there is still a lot of upside ahead in the category with strong tailwinds. We couldn’t be more excited about Ella’s vision for Trendsi to democratize retail to empower more modern small businesses (and the entrepreneurs that build them).
Pictured: Ilana Stern (GP, Peterson Ventures) and Ella Zhang (Founder & CEO, Trendsi)