A £35 million OnBuy investment series A+ round has been announced this morning, which the marketplace says will propel them to the next stage of becoming the UK’s alternative marketplace offering. Currently, they’ve grown their initial £8 million investments into a marketplace now valued at £132 million and there’s no sign of their growth slowing down.
Where are OnBuy today?
But enough about the OnBuy investment numbers as we know marketplace sellers don’t really care that much – what we know you do care about is the opportunity that a marketplace has to offer and that’s impressive. OnBuy has grown to £155 million annualised GMV, almost 1.5 million users and their peak concurrent users on site is around 11,000. They have 36 million products listed from 7,000 retailers.
Put in Amazon terms, OnBuy’s sales now equate to roughly 1% of Amazon’s sales in the UK. That may sound small, but it’s pretty significant for an upstart marketplace and it’s why we’ve continually followed OnBuy’s growth with interest. Over the 16 years we’ve been writing on Tamebay, OnBuy is the first serious contender to the marketplace giants and has now grown to be bigger than the much longer established Notonthehighstreet – and every one without exception considers Notonthehighstreet to be a roaring success story so we have to now view OnBuy in the same terms.
What does the OnBuy investment mean for merchants?
The new OnBuy investment of £35 million, which will be a mix of debt and equity, will fuel further meteoric growth for OnBuy, with sights firmly set on reaching unicorn status in the coming years. Significant input comes from players including Bring Ventures, Norway Post venture arm, Fuel Ventures, Guy Hands (founder and chairman of Terra Firma Capital Partners), Knut Frängsmyr (Deputy CEO of Klarna) and Richard Goulding (founder of Play.com) amongst other strategic investors. In addition to external investment, a fully funded £2M allocation was set aside for existing retailers currently using the platform. This funding will enable OnBuy to further develop its product offering for both sellers and consumers and importantly, pursue global expansion.
What this means for you as a marketplace merchant is that OnBuy have the finance in place to fund their future. For the next nine months we expect to see significant investment in product development and we’re waiting for the announcement of OnBuy opening up in overseas territories. It hasn’t escaped our attention that Norway Post’s venture arm has invested in OnBuy so we’re fully expecting the Scandinavian countries (territories with high disposable income) to be high on the list for OnBuy country sites. There are also plans to use the OnBuy investment to fund development of a consumer app, putting OnBuy in the pockets of millions of consumers and enable purchases at the click of a button.
OnBuy have got to this stage without significant investments in marketing and this is something we’re forecasting for 2022. Currently they’ve done just enough marketing to get to where they are today, but in 2022 expect to see significant steps to increase OnBuy’s brand awareness on the consumer side to draw in a wider audience and increase sales.
“The global ecommerce market is expected to total $4.2 trillion by the end of 2021, a figure that is set to grow even more over the next few years, however it’s alarming to see that the industry is still following the same detrimental and unfair marketplace model that has existed for years. I created OnBuy to provide something unique: a clear, level playing field – and in our 4 years of rapid growth, it’s clear to see that this is a model that works to everyone’s advantage.
This investment will allow us to unlock even more potential and take OnBuy to the next level with an even better, easier to use product than ever before. We’ve made it this far with the help of our early angels, amazing team, trusted retailers and of course all of our amazing customers, but we’re not nearly done yet. We’re here to make noise, challenge the status quo and change the digital marketplace landscape forever.”
– Cas Paton, founder and CEO, OnBuy
What can we expect to see over the next 18 months?
To summarise this OnBuy Investment round, the marketplace has grown to have significant traction within the UK, the next three quarters will be focused on building new platform features and there will be significant brand awareness drive in 2022.
In the short term this may mean that OnBuy focus less on immediate growth, and indeed in the current macroeconomic environment, as we exit the pandemic and consumers return to high street shopping, we may even see a small drop in traffic to the marketplace (and indeed to all marketplaces) as the world resets. This makes it a great time to focus on the platform, and consolidate the experience for the buyers OnBuy has picked up over the past 15 months, before a big consumer brand awareness drive when there are even more enticing features and the all important OnBuy Shopping App is ready to serve them.