Merchants building businesses on giant marketplaces often have to think inside the marketplace’s box, but Medusa, a one-year-old e-commerce startup from Denmark, is going after e-commerce platforms, like Shopify and WooCommerce, with its open source alternative aimed at the JavaScript developer community.
Co-founders Sebastian Rindom, Oliver Juhl and Nicklas Gellner started the company a year ago, though they have been working on the software for four years with an initial customer. What they found, by helping that customer scale their business via marketplaces Shopify and WooCommerce, was that they had to do some more coding workarounds and hacks than they thought should happen.
“You are constrained on how to build software for customers to see scale,” Rindom told TC. “The customer was bullish on e-commerce and wanted to double their revenue in a year, so we worked to figure out what platform they could migrate to to make that happen, and Medusa was what resulted.”
The company’s technology is essentially APIs that provide a “headless” offering — meaning the shop front technology is separated from the back technology so customizations and maintenance can be made in one section without disrupting the other — for merchants that want to be more in control of their e-commerce tech stack.
Rather than hacking your way through, users can tap into default implementations that Rindom says are equivalent to Shopify features, including APIs that connect to various tools, including payment providers, logistics tools and customer management systems. Then when users outgrow those, they can plug into a third-party tool or create one themselves.
Rindom explained that current marketplaces provide certain basic APIs to integrate with, but if you want to experiment with fulfillment, subscriptions or a wholesale channel, it requires access outside of that standard API. Instead, Medusa provides a more modular architecture that enables users to do anything.
It’s clear that even Shopify sees the need for more features for its users to quickly get up-and-running. The future of the digital commerce software market will be driven by the growth of the e-commerce market itself, which is poised to be a trillion-dollar market within the decade.
We’ve also seen venture capital investment pick up in the areas with companies like Fabric, Shopware, CommerceIQ and Swell getting funding within the past six months for headless commerce approaches and infrastructure. Other startups, like Shop Circle, are also developing software for Shopify merchants to do more on the marketplace.
Medusa itself is among that group having raised $8 million in seed funding in a round co-led by LocalGlobe and Dawn Capital, with participation of a group of individual investors, including Squarespace founder and CEO Anthony Casalena, Algolia founder Nicolas Dessaigne and former GitLab executive Scott Williamson. Combined with a pre-seed round from Seedcamp last year, the company has brought in close to $9 million in total funding.
Much of the technology in this space, including Shopify, is over a decade old, which made Medusa an attractive investment, said Mina Mutafchieva, partner at Dawn, in a written statement.
“As a result, the pain points for e-commerce merchants are exploding and most, if not all, we at Dawn have spoken to in the last two years, use inefficient ‘work-arounds’ to achieve their business goals,” Mutafchieva added. “Balancing the right level of a user-friendly API-first approach with a great degree of customizability, Medusa’s product is a dream for developers and merchants who need to customize their platforms while maintaining maximum performance and response times.”
Medusa is already active in e-commerce shops, selling in excess of $100 million a year, and in less than a year has amassed a community of more than 2,000 developers that started some 10,000 projects on the platform.
Rindom did not disclose revenue figures, in part because there is no monetization play at the moment. It is something being planned, he said, but the company is more focused at the moment on validation of its technology and driving adoption.
That focus is where the funding will ultimately be deployed, which includes building products and small APIs, creating content around those APIs and setting materials on how to use them. Medusa looks to hire additional developers and engineers and to invest more heavily in community efforts and establishing partnerships.
Future plans include building a cloud tool for the product that will enable users to connect their GitHub repository to Medusa’s infrastructure to control its tools. That is something the company will charge for, but “is still a bit ahead for the future,” Rindom said.
