More money flowing in the WordPress economy. Today we get the announcement in Business Insider (paywalled), PeachPay, a one-click checkout startup created by recent college grads, is looking to compete with red-hot startups Bolt and Fast as e-commerce booms:
PeachPay, which launched in January, is one of the newest entrants offering one-click checkouts for merchants. The startup just inked a partnership with WooCommerce, the e-commerce provider for WordPress-powered sites. Both WooCommerce and WordPress are owned by parent company Automattic, which was last valued at $3 billion in 2019.
WooCommerce is also investing in PeachPay, participating in its $1.5 million seed round that is currently being raised and is about 30% filled.
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So if we do a little math, the investment for PeachPay is no more than $450,000 (I am assuming that the 30% filled of $1.5 million includes the recent investment).
One more snippet from Business Insider:
The trio had experience with the WordPress and WooCommerce interfaces, and targeting this segment of online retailers seemed a feasible route for PeachPay. PeachPay is currently live with more than 100 merchants. Now that it’s integrated with WooCommerce, PeachPay’s reach will expand to millions of potential merchant customers.
To be sure, it’s still early days. For now, PeachPay is focused solely on the WooCommerce ecosystem and growing its network of merchants in customized ways. While PeachPay’s brand is part of the experience in some cases, it’s also allowing customers to rebrand the offering as their own, a distribution strategy known as white-labeling.
I was not able to get any additional details regarding terms of the investment, but did get a chance to speak with David Mainayar, co-founder and Chief Growth Officer.
Robert: Congratulations on the investment, did you reach out to Automattic or did Automattic reach out to the PeachPay team?
David: We bought access to Post Status, and then started conversations, sharing what we’ve worked on so far, what we had accomplished with PeachPay and trying to get people’s thoughts and feedback. Not really expecting too much, but we did get some feedback, which was very helpful. Then, very fortuitously, I saw a message from “matt”, just a mysterious “matt”, with no upper case letters.
Robert: THE “matt”
David: I didn’t realize it was Matt Mullenweg. And he just very simply said, “PeachPay looks awesome. Would you be open to raising some money?” And I think what clicked with him was the fact that, you open our website, the first thing you see is “PeachPay is democratizing one-click checkout.” I think the whole democratization thing is, he’s a fan of. WordPress is democratizing publishing, WooCommerce is democratizing commerce, and we’re democratizing one-click checkout. So, it seemed to be a good fit.
We went back and forth with Matt, and then we connected with the Automattic team, and they were great. It feels like they have our best interests at heart, which is not always the case with investors. They actually just want to see the ecosystem become a better place, and they see how we might play a role in that, and we certainly hope that’s the case. We hope that we can play our small part with one-click checkout and just make checkout as frictionless as possible.
Robert: It probably helps that Automattic also already uses Stripe.
David: Yeah, yeah, absolutely. There is this technological compatibility parallel. We’re both built on top of Stripe, essentially WooCommerce payments and PeachPay both built on top of Stripe. So, we hope there’s potential for something with regard to WooCommerce payments, but we’ll just have to see.
Robert: This seems like it was a pretty quick investment. When did the conversations start?
David: Late January.
Robert: What’s the goal of the investment or differently what’s your focus with the investments?
David: There are some very well-armed one-click checkout solutions out there. There’s Fast, there’s Bolt. Bolt is more than just one-click checkout. It’s a processor in and of itself, but it’s also payment processor agnostic, it’s got robust fraud detection measures. Fast is more like us, but I think what Automatic understands and what we certainly understand about ourselves is that Fast grew up elsewhere. It’s a newcomer here.
Fast grew up in BigCommerce, and even the BigCommerce merchants have some gripes, to be honest. At the end of the day it’s about building a plugin that doesn’t force merchants to make any trade-offs. Merchants don’t want to forego the use of one plugin, like a discount plugin or something, in order to use Fast or PeachPay. And we understand that, respect that.
We have a very comprehensive plugin, theme, hosting provider, site builder, compatibility roadmap. And we think that’ll hopefully go a long way with partnerships with some of these plugin developers, web developers, hosting providers. Anything that most WooCommerce merchants use we’re compatible with and I can say this is not the case with Fast currently.
Robert: It seems that PeachPay is looking to solve the redirected to PayPal user experience?
David: The magic of PeachPay is that it essentially is on the same page, or so it seems. Essentially PayPal rips you out of the store. You can see when the PeachPay window is open, you see the product page behind it, you’ll see the cart page behind it, and you can easily just return to it if you need to.
Robert: It is very elegant, especially for new stores. What is PeachPay doing to onboard new merchants?
David: We’re providing professional services around implementation integration ourselves. We pride ourselves mainly on two things, which are engineering agility, and customer obsession. So, we have these wonderful relationships with some of these merchants purely because of the fact that they’re just so wowed by how fast we’re moving, essentially, with the things they request. And it always brings a smile to our face to see a merchant saying, “Wow, I mean, that was so fast. You know, I was not expecting you to get to this until, you know, several days after my request.”
Robert: What’s the revenue plan?
David: The plan is essentially very simple. Stripe will seed a portion of the transaction fee if you have sufficient volume. We’ve already started conversations with Stripe. There are other payment providers as well. I think the future is payment provider agnostic, much like Bolt. To Bolt’s credit, they integrated with a number of different payment providers including themselves. And that’s the model we’re going off of as well. And obviously this is contingent on different discussions and deals.
Square is also open to this kind of arrangement. It’s pretty clear, obviously this is all contingent on massive volume. This is a pure and simple network play. You have to get as many stores as possible. So, distribution is a huge sticking point, but to actually get that distribution you have to build a good product that is functional, works with all your favorite plugins and themes.
Robert: Can I drop the plugin on just my WordPress site?
David: Right now it does have to be used on a WooCommerce site. Pretty much it’s only for WooCommerce stores right now. The future probably is platform agnostic.
Robert: So, you talked about adding more development and getting that going. What’s that first set of new functionality that’s going to be?
David: Absolutely. So, one big thing is discounts. We want to make sure that we work with more and more discount plugins. There are quite a few, and there are various ways of implementing discounts. Just in general, it’s hard to even be general about this as opposed to hyper specific, and if I were to be hyper specific, the list would be very long, but there are so many plugins, right? So many plugin, so many themes, and we’re just trying to build compatibility patches for all of them. We’re trying to work with everything so that no matter what your combination of theme and plugins is, we will work. That’s what we’re trying to make happen.
And yes I have a quick quote from Matt Mullenweg as well, “Automattic is happy to support as many businesses in the WP ecosystem as we can, and investment in one way we do that.” Looking forward to see how this WooCommerce investment progresses.