Influencers are great at getting people to buy stuff. Social-commerce startup Levanta wants to tap into that power of persuasion to boost sales for merchants on Amazon, Walmart, Shopify, and other retail sites.
The company closed a $22 million Series B round this week as it looks to expand its business beyond its three main partners and grow in international markets, Business Insider can exclusively reveal.
“We’re investing really heavily in going past Amazon, so deepening our relationship with Walmart, with Shopify, but then also going even beyond that and acquiring additional marketplaces that we’re going to bring into the fold,” said Ian Brodie, Levanta’s CEO and cofounder.
Levanta’s core business is matching retail sellers with a network of creators to share product samples and offer sales commissions in exchange for promotional videos. The company said it has over 90,000 vetted creators in its network.
The company pushes sellers to set affiliate rates in the 15% to 20% range, Brodie said. It also helps partners with operational tasks like measuring performance, paying creators, automating tax forms, and setting up flat-rate brand deals with creators when it makes sense. It makes money by charging sellers a flat fee to use its tech, while also taking a cut of sales its platform helps generate.
Affiliate marketing is expected to drive more than $240 billion in US e-commerce sales this year, up around 12% from the previous year, according to EMARKETER, Business Insider’s sister company. Competition is heating up, as companies like LTK, Impact.com, and TikTok Shop offer myriad ways for influencers and publishers to earn commissions. In October, affiliate platform ShopMy announced it had raised $70 million in funding at a $1.5 billion valuation.
Levanta said it differentiates itself in the market through its technology platform, which streamlines management across multiple platforms for affiliates and creators. It’s also chosen to focus its business on retail sellers, who have growing marketing budgets but less experience working with influencers.
“Our biggest moat above anything else is our ability to enable and educate retail marketplace sellers on the benefits of affiliate and creator marketing, getting them involved, unlocking that budget, and then helping them actually go and partner with creators,” Brodie said.
The affiliate business has come under scrutiny in recent years as companies like Capital One and PayPal’s Honey have faced accusations of unfairly doling out sales commissions. Brodie said industry misattribution is a “bummer,” but that Levanta’s business hasn’t been directly impacted by it.
Levanta has just over 100 employees and has been profitable or break-even every year since launch, Brodie said. The company has staff in the US and the Asia-Pacific region, and it’s looking to grow head count in Europe, too. As part of its new funding round, it allowed current employees to cash out some of their vested options to get liquidity, Brodie said.
The company’s Series B round was led by the growth-equity firm Volition Capital, with participation from Long Run Capital. It has raised $43 million in total funding. Volition fronted the vast majority of the capital in this round and Levanta’s Series A, which managing partner Larry Cheng said was “very rare” for the firm.
Volition, which has invested in other influencer-focused businesses like Chamberlain Coffee and Doing Things, views creators as a “core driver of commerce,” Cheng said.
“We love to invest behind trends that you know will continue to persist for many years, if not decades to come,” he said. “We’re more predisposed to the picks-and-shovels and the network-based business models that enable influencers rather than influencer-led brands or businesses that are built around the specific influencer.”
