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Commercetools — a “ brainless commerce ” platform that provides APIs to companies build online storefront — see a major encouragement in its business just a few year ago , raising money at awhopping $ 1.9 billion valuationas the world went rat online in the Wake Island of the COVID-19 pandemic , and job rushed to improve their e - commerce operation .
Today , the playbook looks a little different for vitamin E - commerce , and for Commercetools .
TechCrunch has ascertain and confirm that Commercetools has laid off gobs of employees over the last few hebdomad , including around 10 % of staff earlier Wednesday , after give out to meet its sale growth targets . It ’s also making a act of executive change , including parting way with its chief taxation officer and CFO , and transfer the roles antecedently held by its chief information security and compliance officer .
“ While we ’ve made meaningful progress and our business continues to maturate , over the last several quarters we have n’t in full achieved our aggressive tax income growth targets , ” CEO Andrew Burton order in a memo to the company , which TechCrunch has viewed . “ That reality has require me , our executive team , and our Board to take a hard , in - depth tone at where we strike unretentive , where we showed strong suit , and what need to modify to build up a stronger futurity . ”
“ meaning ” restructuring will be stock out in marketing , sale , and interior operations such as HR and finance , according to the memo . Select stave in client and product evolution will also be cut “ after review operation and impact . ”
The full memo , divvy up by a source and confirmed as authentic by the fellowship , is write below .
Burton , speaking to TechCrunch after we contacted the society about the memo , allege that around 10 % of the company ’s employees were affected today , but declined to give an exact identification number . A root , who spoke to TechCrunch on experimental condition of anonymity , suppose Wednesday ’s layoffs total more than 70 people and , including selective reductions he claim encounter over a geological period of several weeks , make up to 20 % of staff . The fellowship disputes that there have been any layoffs beyond those announced Wednesday . Burton also added the company has 25 - 30 open roles it ’s search to fill .
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It ’s a hard blow in the road for a caller that appears to have had a unassailable run in the grocery store .
Originally founded in 2006 in Munich , Germany , Commercetools raised just $ 30 million in remote support before it wasacquiredby retail behemoth REWE in 2015 . By 2019 , it was get word its revenues growing at 110 % annually . REWE spin it out as a inauguration again , backed with $ 145 millionin funding from Insight Partners at a $ 300 million valuation .
After COVID-19 reach , Commercetools ’ business boomed as shopping of all variety went digital . Less than three year after that Insight cycle , it was able to raise$140 millionat a $ 1.9 billion valuation led by Accel .
Through all of this , Commercetools ’ founding father Dirk Hoerig led the company as CEO . He stepped away from the top position in July 2024 , to be replaced by Burton . ( Hoerig has hold a rump on the instrument panel and is the company ’s chief innovation officer . )
At the time , the company was making “ far beyond ” $ 100 million in yearly fall back revenue , and Burton ’s arrival was seen as a precursor to the companionship blend public , reportedly in 2025 or 2026 . Burton declined to comment today on an IPO or other future plans .
The memorandum cites , at a high level , that Commercetools was missing its growth objective . There have been other more specific shifts in the market .
While Commercetools was a very other mover in the space of “ headless commerce ” — a term first coin by Hoerig — a act of competition have come forth in more late year . master among them is Shopify , which to begin with pitched itself to little merchants and has gradually grow into working with the same larger retailers that Commercetools target .
At the same time , e - commerce has continued to grow , but not at the breakneck pace see between 2020 and 2022 . The most recentU.S. Census Bureau figuresnoted that U.S. retail e - commerce develop just 2.7 % from the third to the fourth quarter of 2024 , totaling $ 308.9 billion and calculate for 16.4 % of all retail sales . Earlier today , eBay noted that its Q4 sale grewjust 1 % .
Burton also cite interrogation marks over how duty would playact out as another cistron impacting east - commerce companies , and the knock - on effect that has on provider like Commercetools .
“ We had really challenging goal that we had not readjust to reflect the macro - economic uncertainty , ” Burton told TechCrunch Wednesday .
Finally , while firebrand - owned storefront — a mainstay line for company like Commercetools — continue to make up a gargantuan part of the e - commerce food market , they ’re also competing against a new waving of marketplace . Temu , Instagram , and TikTok all stage a new kind of societal commerce that once again could vary the game . Other “ headless ” company — be they focused on eastward - Department of Commerce or content direction or something else — that have seen growing with the growth of the internet now have to respond to changing tides , be it a new method of cognitive content consumption or purchasing good , or AI .
The musket ball ’s in the court for company like Commercetools to prognosticate and ramp up for wherever and however hoi polloi may want to betray in the future .
memorandum below :
study : Important Update
Hi squad ,
Over the past few yr , we set ambitious goals , foresee unassailable securities industry growing . While we ’ve made meaningful progress and our patronage continues to get , over the last several tail we have n’t in full achieved our aggressive revenue development targets . That world has postulate me , our executive team , and our Board to take a surd , in - depth look at where we go down poor , where we showed persuasiveness , and what needs to change to build up a strong future tense .
As part of this , we made the difficult decision to restructure a few squad , implement targeted reductions in specific expanse , and eliminate some roles . This decision is not a musing on single commercetoolers , their natural endowment , dedication , or impact , but alternatively a necessary step to focalize our focus and re - positioning commercetools to be in a strong position to navigate and succeed in this turbulent grocery store .
Many of you have build up strong relationships with the fellow who are bequeath today . They have form commercetools in shipway grownup and small , and we are truly grateful . We are provide all impacted employees with severance and continued benefits above the marketplace standard . to boot , we are preserve their entree to OpenUp , our on-line political program offer various mental health backing resources , to support them in this transition .
I know this is hard news to process . Change brings incertitude , and we are committed to render as much pellucidity , sustenance , and direction as potential . To help suffice common inquiry , we ’ve put together an Employee FAQ that outlines key details about the restructuring , resources available , and what ’s next .
To give everyone quad to speculate , we are give all employees this Friday , February 28th as a day off .
Your executive loss leader will adjoin with your section after today or tomorrow to discuss what this means for you and your squad .
What ’s change
speed of light - degree update :
team with Significant Restructuring :
modification is never easy , but it ’s at the core of what we do — helping businesses adapt to new realness . Now , we ’re doing the same . In ourCompany All Hands tomorrow , we will take the air through these change in more detail — the why , what , and how we move ahead together — staying true to our belief in adapting boldly to build what ’s next .
Andrew
update to note that Commercetools argufy the full number of layoffs claimed by a author .
