Funding for retail tech is at an all-time high, and for good reason. Ecommerce now makes up more than 20% of the total retail market and that number will continue to grow. This growth is being driven by innovative ecommerce infrastructure technology which offers brands and retailers better, easier ecommerce sales.

Widespread internet access in the 90s opened the door for giants like Amazon and Alibaba to begin the ecommerce revolution. These big players gave themselves a competitive advantage by investing significant amounts in R&D and building their platforms in-house. As a result, startups were born from a need – to provide the ecommerce infrastructure solutions that would support the rest of the market. These tools have made ecommerce what it is today.

Three Waves in the Evolution of Ecommerce Infrastructure

The First Wave – The Ecommerce Enablers

The enablers arrived on the scene around 2005. Companies like Shopify, Payoneer, and Magento provided the tools for any retailer to move online. Individual artisans or brands as big as Nike can both easily sell to customers anywhere.

The Second Wave – Customer Experience

Beginning around 2010, an assortment of startups began developing ways to improve and optimize the customer experience pre, post, and at purchase with innovations in product discovery through delivery.

Since then, ecommerce has grown to become a giant, complex, and lucrative industry of its own. The vastness of the ecommerce environment has created opportunities for countless startups, many of whom have already gone public.

The Third Wave – Ecommerce Democratization

So what’s next for ecommerce tech? The upcoming wave of ecommerce tech is amplifying the voices of individuals – both retailers and consumers. If the enablers allowed any brick-and-mortar retailer to establish an ecommerce presence, today’s tech startups are allowing anyone to become an online seller. A new generation of ecommerce-native SMBs has sprung up, which is giving rise to new vertical software solutions that support the needs of these businesses, including ecommerce insurance, warehouse solutions, and more.

We’re also seeing consumer preferences and values play a stronger role than ever and social and technological trends from other areas are influencing ecommerce offerings. Companies are leveraging blockchain technology and finding ways to improve sustainability at every step. When it comes to customer experience, they are exploring new worlds, including instant delivery and unlimited customization. You can find out more about these trends and what’s driving them in the presentation below.

Israel’s startup ecosystem is a hub for companies that are making the most of these opportunities and pushing the limits of ecommerce. Recently, nine Israeli companies were mentioned in CB Insights’ Retail Tech 100: the top retail tech companies of 2022. We believe that the 2027 map will include a few Israeli companies as part of the third wave of ecommerce tech.

We at Viola have invested in several companies in the space, including Bringg, Syte, Feel, and Spott, and we continue to keep an eye on trends in this growing ecosystem.

Read the full deck to find out more about the past and future of ecommerce tech, and if you’re developing a new ecommerce technology reach out to us at: tomerm@violagrowth.com, yaela@viola.vc

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