In 2022, over half a billion people were expected to place online orders in Europe.

An industry that is constantly growing, starting from a consistent boom since 2020-2021, when COVID-19 forced people to move their daily shopping routines online. According to Statista, 230.5 million people shop online today, and that number is steadily increasing year over year.

In this article, we’ll go over what the marketplace industry looks like, marketplace trends to watch out for in 2023, the main marketplace platform examples, and the main takeaways for your upcoming investment!

Marketplace definition

An online marketplace is like an e-commerce website or mobile app where sellers meet buyers and offer products and services. A marketplace platform differs from an e-commerce store by allowing businesses to sell their products or services in a dedicated place.

While on a simple online store, the seller is focused on various things, from the website, orders, shipping, and many others, on the marketplace platform, they focus exclusively on shipping and delivery, the other parts being operated by the platform’s business owners.

Another core advantage of online marketplaces is their design dedicated to attracting more user demand, offering them a portfolio, products, or services from multiple vendors. Some of the most popular marketplace platforms worldwide are Amazon, eBay, Alibaba, AliExpress, Etsy, and many others.

The evolution of Marketplaces in 2022

The evolution of marketplace platforms and the accelerated adoption of online shopping by many people worldwide offer many opportunities for both founders of marketplace startups and investors in this sector.

Here is what the industry looks like and some of the latest trends you can take away for your upcoming deals.

Online shopping has had a strong momentum since 2020

Consumers changed their behaviour, and in +80% of cases, these tend to maintain their online shopping habits even in the future, according to Alvarez Marsal Consumer and Retail Group. Large marketplace platforms like Amazon or eBay have spotted the trend and are constantly trying to support consumer needs.

Venture capital funding for marketplaces in 2022 was 50%, going from $149BN to $74BN last year. According to the recent report published by Dealroom, this drop is leading us back to pre-pandemic numbers.

The global community of unicorns added 41 new companies to its portfolio, but the total number of unicorns has been the lowest since 2016.

Source: Marketplace Report 2022 - Dealroom

Investment in Marketplaces worldwide had a difficult year, but not in Europe. According to Speedinvest, the Marketplace Index outperformed NASDAQ in the past years.

The industry's market capitalization has exceeded $500 million² and is the second most invested industry after Fintech. The European market changed significantly recently, and these are a few takeaways from Speedinvest to have in mind before your upcoming rounds of funding:

Positive outcomes:

• ​​Marketplaces are still a key investment area.
• Mega rounds for marketplace businesses with strategic differentiators are still happening.
• Recessions are a great time to build a successful business.

Negative outcomes:

• Have a clear vision of the new market reality that we live in.
• Investors are more oriented on capital efficiency compared to ever before.
• Raising money has become harder as capital shifts to standby mode.

Source: State of Marketplace startups in 2022 - Speedinvest

While consumers are attracted to marketplaces because they offer convenience, choice, and value, investors are looking closely at the type of marketplaces available, having a keen preference for B2B marketplaces.

In Europe, there’s a focused overview available from Point Nine Capital which started publishing yearly reports of the B2B Marketplace Funding Napkin. The analysis looks at the funding rounds from the fund portfolio and other rounds funded by European VCs investing in Marketplaces.

Marketplaces startups had a great year in funding rounds, from seed rounds to Series B, and a great stage for valuations.

Seed rounds

Increased in:

• in round size (1.4M in 2021 vs. 3.6M in 2022)
• pre-money valuation (4-12M in 2021 vs. 12-21M in 2022)

Decreased in:

• net review with 10K (from 0-50K ARR in 2021 vs. 0-40K ARR in 2022)

Series A rounds

Increased in:

• in round size (7-12M in 2021 vs. 11-20M in 2022)
• pre-money valuation (20-50M in 2021 vs. 41-100M in 2022)
• net revenue (1M ARR in 2021 vs. 1-2.4M ARR in 2022)

Series B rounds

Increased in:

• in round size (20-50M in 2021 vs. 27-64M in 2022)
• pre-money valuation (90-300M in 2021 vs. 176-430M in 2022)
• net revenue (5M ARR in 2021 vs. 3.6-7.2M ARR in 2022)

Source: The B2B Marketplace Funding Napkin in 2022 - P9 Capital

What to follow & where to invest in Marketplace platforms?

Fintech, Food, and Healthcare marketplaces raised larger funding rounds worldwide in 2022, directing investments in food logistics and delivery, mortgages, lending, healthcare platforms, or decentralized financial solutions.

Source: Marketplace Report 2022 - Dealroom

A trend to follow: AR/VR in Marketplaces

Virtual Reality is part of the Extended Reality trend catching up in various areas of businesses. VR in marketplace platforms is used to find, purchase, sell or download VR content for gaming & entertainment, healthcare, education, or other industries, with gaming continue leading in the first place.

The VR Marketplace market reached $6.9BN in size by the end of 2021, according to GlobalData, and is expected to grow at a compound annual growth rate of 25% annually by 2030. Giant enterprises are accelerating the development of this sector by investing more in AR/VR solutions that integrate with their core solution.

For example, Amazon introduced in the past two years a series of AR shopping features to view multiple items at once, try goods right in your home before you buy or try on a pair of shoes, and has been on a hiring spree in 2022 for advanced AR experts to build more embedded products.

How the future of Marketplaces looks like?

Industries are changing at a higher speed than ever before.

What we used to know about online shopping before COVID-19 is highly different than now - due to consumers changing their behaviours, adopting online as part of their daily life, and accepting that it is faster to order in two easy clicks than going to an offline store.

Since 2020, when a pandemic event resuscitated what we used to know, we have seen that macroeconomic events play a significant role in how industries evolve. So, we’ll be following these elements closely:

• Inflation trends and development.
• The increase in mobile spending worldwide.
• China is gaining economic weight fast & how this is influencing industries.
• The post-effect of COVID-19 & Russian War in Ukraine on global markets.

The constant changes in the regulatory landscape around many industries are also more likely to impact the future of marketplaces. Sectors like finance, cybersecurity & data protection significantly impact how marketplace platforms continue to be designed or how consumers adapt their behavioural patterns to these new regulations.

Marketplace use cases across different sub-sectors

Online marketplace platforms have a wide range of use cases in different other industries and can be divided from multiple points of view, such as:

• The type of buyer or seller who participates in the transaction.
• The type of goods being sold (products, services, investments, crowdfunding).
• The sub-sectors addressed by the marketplace goods (e-commerce, food, etc.).

E-commerce marketplaces

An e-commerce marketplace is a platform hosting a range of products sold by different types of sellers, such as:

• B2B marketplaces - platforms dedicated to wholesale selling and buying between two organizations.
  • Examples: Alibaba, Rakuten
• B2C marketplaces - similar platforms serving the needs of typical consumers.
  • Examples: Amazon, AliExpress
• D2C marketplaces - a place where businesses sell directly to customers without additional intermediaries.
  • Examples: Productpine, Brooklinen
• C2C marketplaces - platforms used in exchange for services.
  • Examples: BlaBla Car, Fiverr
• P2P marketplaces - online platforms connect people who want to buy with that selling that type of service.
  • Examples: Uber, Airbnb

Service marketplaces

Service marketplaces are another form of platforms that has played a definitive role in shaping the growth of online marketplaces. Exchanging services in different formats and between different types of players is now easier thanks to a wide range of solutions becoming available.

The digital economy is gaining more traction and creating a stronger on-demand economy. This is why the industry has seen a spike in startups and solutions, such as Uber, Fiverr, Upwork, TaskRabbit, and many others.

Rental marketplaces

Like service marketplaces, rental platforms create a dedicated place where people can offer different types of goods for rent. There is no more need to write down an announcement post on the local news, but write a few words online and already have people interested in renting your goods or apartments.

Rental marketplace platforms offer more convenient and sustainable solutions empowering people to use goods for some time more easily and without wasting extra amounts by buying too much.

One of the most popular examples in this sector is Airbnb, and while it was scary for people at first, it ended up being successful. People now feel comfortable enough to rent their apartments and houses to strangers thanks to its unique functionalities compared to real-life solutions.

User profiles & renting history of the buyer, a more rich listing of solutions available, and the option to easily pay online for what you buy, and read what other people think, are just some of the most popular features of online rental marketplaces.

Marketplace startups raising funding through SeedBlink

ACTIVE ROUNDS

Productpine (Netherlands)

Productpine is an Amsterdam-based startup that has developed technology that saves direct-to-consumer brands up to 75% of their marketing costs. These savings are invested in hand-picked sustainability projects to compensate for CO2 emissions fully, matching the best consumer prices.

A growing number of brands depend on advertising to grow in the DTC market, and with the costs of publicity becoming higher, cutting costs became a top priority. On top of this, becoming a more sustainable solution has been only on the wishlist of companies. Productpine makes it easier for brands to adapt their focus on sustainability and adopt greener solutions.

Productpine has an active round right now on SeedBlink, starting with 1.700.000 EUR pre-committed money, having Acequia Capital as the lead investor and targeting a total investment of 2.000.000 EUR.

Invest in Productpine (by March 5th, 2023)

PAST ROUNDS

CAPTAINBOOK (Greece)

CAPTAINBOOK is a Greek online platform that connects tours, activities & experiences providers and offers them a very powerful yet simple booking engine connecting them to a network of local trusted resellers such as hotels, Airbnb hosts, and travel agencies.

CAPTAINBOOK had an active round on SeedBlink in 2022 and collected a total investment of 187.500 EUR.

Take a look at CAPTAINBOOK

Comarket (Romania)

Comarket is a Romanian B2B digital marketplace that brings together professionals and suppliers from the Hospitality Industry to digitalize and streamline business relationships between them.

Comarket had an active round on SeedBlink in 2021 and collected a total investment of 215.000 EUR.

Take a look at Comarket