Before ShopKeep, POS systems were frustrating and unfriendly to small businesses. Their high costs were irritating, and untimely crashes were unacceptable. But ShopKeep has changed it all. The NYC Startup that changed small businesses forever is planning to expand their wonderful team with their new Series D funding by Activant Capital. With their cloud-based solution to running a business they have seen plenty of success and hope to see more.
Today, we sit down with Norm Merritt, CEO and President, who walks us through this new funding and provides an up close view of this thriving company.
Who were your investors and how much did you raise?
We raised $60M in Series D funding. This brings the company’s overall funding to $97.2M, signifying it is one of NYC’s most thriving startups. The round was led by investor Activant Capital with support from existing investors. ShopKeep plans to use this injection of capital to aggressively grow its overall US customer base, strengthen industry partnerships, and launch international operations, starting with the UK this month.
Tell us about your product or service.
Originally founded by a small business owner in Brooklyn, New York, and now used by over 18,000+ merchants across the US, ShopKeep provides independent merchants with an intuitive, secure, iPad-based point-of-sale system, combined with detailed data and analytics tools and 24/7 customer care and support. Our comprehensive mobile payments solution offers the ability to optimize staffing, regulate inventory and access sales reports and customer information and more, all on one seamless, cloud-based platform. We also give small business owners access to a wealth of previously uncaptured data and detailed insights on their businesses so they can make more informed business decisions. ShopKeep is acutely aware of the needs, challenges and opportunities facing merchants on a day-to-day basis – we like to see ourselves as the IT and operations department for small businesses and a valuable long term partner. Our ultimate goal is to help small business owners run their stores and restaurants more effectively, and to support and guide them through rapidly changing technology innovations, industry regulations and changing consumer habits.
What inspired you to start the company?
ShopKeep was founded by longtime small business owner, Jason Richelson, after he became increasingly frustrated with the inefficiencies of the existing point-of-sale market offerings. The final straw came when his Windows POS system crashed while he was on vacation, forcing him to shut down his business temporarily, resulting in significant lost revenue. Channeling his frustrations and experience as an entrepreneur, Jason set out to create a new and highly intuitive point-of-sale system, based on his first-hand understanding of the specific needs and concerns of small business owners. By leveraging the capabilities of Apple’s iPad, he was able to build a secure and reliable cloud-based solution.
How is it different?
ShopKeep is helping to revolutionize the payments process for small business owners, giving them an easy to use, cost effective, cloud-based payments solution. Leveraging the Apple iPad as a platform, ShopKeep has been able to democratize detailed data and analytics, making these numbers available to small business owners, helping them to analyze how they are running their businesses and make more informed and calculated business decisions. Crucially, in the rapidly evolving mobile payments space, ShopKeep’s cloud-based solution is not only more reliable and more secure than previous systems, but also allows small business owners to stay one step ahead of the curve. With ShopKeep merchants are able to adapt to changes and shifts in the payments industry, to embrace new forms of payment and to accommodate changing consumer habits.
ShopKeep constantly rolls out new features to help streamline merchant operations. One recent, unique feature we have realized is Serverless Sync™ – which enables restaurant, bar and food truck owners to wirelessly sync their registers at no additional cost. We’ve also rolled out ShopKeep PocketTM, which is a best-in-class mobile reporting application that enables merchants to quickly access their business data in real-time, wherever they are giving them dramatically increased flexibility to run their businesses from anywhere. Most recently we introduced ShopKeep Payments, which offers merchants a commitment-free credit card processing solution in addition to their existing POS and backend analytics solution, creating a one-stop shop for all the tools independent merchants need to run their businesses effectively.
What market you are targeting and how big is it?
ShopKeep caters to the needs of small and growing businesses across the US and, most recently, the UK. Already with over 18,000 merchants in the US alone, ShopKeep touches nearly all industries from retail and restaurant to pet shops, gift shops, vape shops, boutiques, food trucks and more. There are an estimated 28 million small businesses in the US alone so the market opportunity for our business is huge – we’re excited about the future for ShopKeep and for our customers.
What’s your business model?
ShopKeep is a no-contract, pay-as-you-go, monthly subscription service. There are no extra fees for maintenance and service and all tech/customer care support is included in the monthly charge. Shopkeep’s pricing is simple: $49 per month per register. Our basic hardware packages then start at $809, this includes everything you need to get started with the ShopKeep system; the cash drawer receipt printer, iPad enclosure and credit card reader. Apple iPads much be purchased separately and start around $399.
What was the funding process like?
Our Series D funding was pretty similar to the other rounds we’ve been through. It’s important to set expectations, meet with a number of potential investors and ultimately to select the investor most in tune with what you’re trying to achieve. The folks at Activant really bring a lot to the table and made the choice easy for us.
What are the biggest challenges that you faced while raising capital?
The biggest challenge I faced during funding was operating without a CFO; I played both roles throughout the entire process.
What factors about your business led your investors to write the check?
ShopKeep is a classic SaaS business with high margins and high growth. Our unit economics are superior and continue to get even better. ShopKeep also has a very loyal customer base and provides an excellent service to a broad swathe of the American economy. I believe these factors played a role in getting our investors to write the check.
What are the milestones you plan to achieve in the next six months? ShopKeep was founded in 2011 and has grown rapidly since then. While headquartered in New York City, we’ve expanded to include offices in Portland, Chicago, Washington, D.C., Belfast and most recently, London. We will be investing significantly in marketing and sales efforts in UK and building our business in this region. We will also be looking to take on top talent in order to build a world class team, so we can effectively carry out these strategies and continue to expand internationally.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
Companies should know that it’s all about execution and doing what you say you’re going to do. Executives must be sure to set appropriate expectations and then deliver. Capital will follow.
Where do you see the company going now over the near term?
We’re always looking to further streamline merchant operations through updates to our system. In the last year, we’ve rolled out Severless Sync, ShopKeep Pocket and ShopKeep Payments, which help independent merchants run more efficient businesses across multiple industries. In the near term, we’re looking for ways to expand and improve our features and offer merchants the best functionalities possible. Additionally, while we already have an engineering focused office in Belfast, we have only just opened our UK office and are looking forward to bringing our solution to many more businesses in this region.
Where is your favorite place to grab a drink in NYC on a nice summer night?
For me, there is nothing quite like a good cup of coffee. A recent favorite has been Fika, a Swedish coffee house chain… who incidentally also use ShopKeep! 😉