Exclusive: AppHub, a Shopify app buyer, raises $95M to build and buy apps as developer ecosystem matures

  • AppHub has raised $95 million from growth company PSG.
  • AppHub builds and acquires apps aimed at ecommerce merchants.
  • With its most recent acquisition Boost, it now has more than 25 apps in its portfolio.

AppHub, an ecommerce enablement platform that launched in 2021, has raised $95 million from growth company PSG to continue building its portfolio of apps as changes come to Shopify’s app ecosystem.

The startup creates and acquires apps developed for online sellers. Its portfolio includes more than 25 apps, including REVIEWS.io, an app that allows sellers to collect text, video and photo reviews about their online stores, and Orderbump, an upsell app at checkout and post-purchase.

AppHub also announced Tuesday that it has acquired Boost, an AI-powered search and discovery app, for an undisclosed sum.

More than 150,000 merchants now use AppHub apps, CEO and cofounder Kris Eng told Insider. Those merchants sell through a number of different ecommerce platforms like BigCommerce and WooCommerce, but most are on Shopify, Eng said.

The Shopify App Store is home to around 10,000 apps that help merchants with different functions like store design, product sourcing, search engine optimization, marketing, and shipping.

This app ecosystem is starting to mature, with big players like Klaviyo and Attentive preparing for IPOs and other smaller players becoming attractive acquisition targets as it has become more difficult to raise venture capital. This could mean an opportunity for companies like AppHub.

Eng credited Shopify leaders like CEO Tobi Ltke and chairman Harley Finkelstein with creating an ecosystem that is “amazing for developers like us.”

“They keep pushing APIs, ecosystems and different core areas to integrate,” he said.

Kris Eng is co-founder and CEO of AppHub

Kris Eng is co-founder and CEO of AppHub.

App hub

Shopify recently unveiled a AI-powered assistant called Sidekick, which aims to help merchants get answers to questions about running their stores. It also has the Shop app, where shoppers can discover products from Shopify merchants and track incoming orders after they’ve been shipped.

Matt Tennenhouse, director of M&A at AppHub, said AppHub sees these innovations not as competition for existing third-party apps, but as creating additional opportunities for developers to build upon.

“There will be continued momentum, continued ways to be creative, find new solutions and unlock further growth for merchants,” Tennenhouse told Insider. “So I think even with the consolidation, there will continue to be a lot of different opportunities for us and other companies to continue to enter the ecosystem and make an impact.”

Deciding whether to build or acquire

AppHub decides whether to buy an app or create its own solution on a case-by-case basis.

In the case of its most recent acquisition, the AppHub team felt that Boost could address a very specific yet complex pain point for merchants. Its technology can do things like use a shopper’s past search history to get more personalized recommendations.

“So, for example, if someone is looking for a men’s shirt and then a few minutes later they are looking for shoes, being able to pick up and evaluate, okay, I’ll list the most recommended as men’s shoes,” Tennenhouse said. “I think that kind of AI and machine learning is something that will really help drive conversion for merchants.”

But for other categories, it might make more sense for AppHub to build a solution from scratch.

“There are spaces where the category is less mature or doesn’t have clear winners, so we’ll try to build one,” Eng said.

“We’re entrepreneurs, but deep down we’re also developers,” he continued. “We tend to take a very balanced approach to what we’re doing because we need to create value in both directions.”

AppHub is profitable, Eng said. The company previously raised $60 million from growth equity firm Silversmith Capital Partners in early 2022.

The new funding from PSG will allow AppHub to continue investing in its existing portfolio and look for other apps to acquire.

“AppHub has, in our view, a unique opportunity to lead a dynamic and fragmented e-commerce market,” PSG chief executive Matt Stone told Insider. “The company’s strong growth profile is a testament to the value of its software solutions to the merchant community and we look forward to supporting the team as it continues to expand its platform and set merchants up for success.”

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Image Source : www.businessinsider.com

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