PeakSpan’s Thesis for Sales Layer

PeakSpan is thrilled to be sharing our leading Sales Layer’s Series B financing. With this capital, we intend to grow product and sales resources with a particular focus on entering the US market. Sales Layer is a global business with a world class team with current headquarters in Valencia, Spain.

We have been tracking the product information management space for several years at PeakSpan, including speaking with the Sales Layer team for over a year prior to leading the Company’s Series B financing in May of 2022. We’ve witnessed the market demand pull for PIM intensify as E-Commerce volumes skyrocket and perhaps more importantly — due to the explosion of SKUs, rich product information and selling channels. Check out Birkenstock for example. For what used to be a very simple sandal listing, we now have 12 size categories for each of women, men and kids.

Birkenstock also offers regular/wide and medium/narrow foot styles. Further, you can order your sandals in tobacco brown, habana, black, blue, dusty blue, etc. Not only can you order these options, but you are able to view the sandal in all of these colors both on a standalone basis or shown on a model AND in a video (and in some cases with AR/VR). Taking into account the different styles of sandals, the gender, the sizes and the colors — we roughly calculate 174,960 variations — each with a specific product landing page with dozens of photos, videos and rich product information. This is the PIM market opportunity. The data is only getting richer and more complex as our society moves from one of mass production to mass customization. To further underscore the importance of product information — Birkenstock sandals are also sold on Amazon, Zappos, Famous Footwear and several other online retailers. It only takes a few minutes of perusing these websites to observe the immense levels product data. Modern PIM platforms help manufacturers and brands such as Birkenstock manage product information consistently across all sales channels, allowing teams to update the information in a single location and push out updates to all endpoints.

The B2B Opportunity

What we love about Sales Layer is that they are not going after the Birkenstock market. Plot twist!? Sales Layer has emerged through our research as having a clear opportunity to dominate the B2B PIM space. Conceptionally, when we talk about “B2B” businesses, consider the volume of products being manufactured and how those products make it into the hands of the end-consumer. Some products are manufactured and sold directly where the brand is selling the product (this is the B2C (Birkenstock) opportunity that Salsify attacks). However, the vast preponderance of manufacturers sell to distributors, wholesalers and retailers (this engagement, between manufacturer and retailer, is the B2B opportunity). Further, Sales Layer is able to sell into wholesalers and distributors who also sell into the retailer. In summary, Sales Layer’s ICP is B2B SMEs (built up by manufacturers, wholesalers and distributors). Regardless of the type of customer — our strong view having spent ample time in B2B purchasing is that the process is rarely digital and generally pursued via static product catalogues, phones calls, etc. despite having the same product complexity outlined above with Birkenstock which highlights the opportunity we see for Sales Layer and why we think B2B is just as big an opportunity as B2C but with far less penetration.

Below is PeakSpan’s thesis for Sales Layer:

Investment Thesis

The Product Information Management space represents an increasingly strategic but long-overlooked category of the broader commerce supply chain. In addition to explosive E-Commerce volumes, we have seen product and syndication complexity skyrocket due to the ever-growing number of SKUs, online storefronts, and sales channels. To successfully sell from a diverse product catalogue concurrently at scale, it’s essential to pull and syndicate product data from a central point and single source of truth to ensure brand consistency, product experience and order accuracy for the end purchaser. Further, cross-functional group and cross-geography collaboration around product information and near-impossible without a cloud-based system of record. PIM adoption has historically lagged behind similar systems of record — ERP and CRM (PIM is estimated at ~25% penetration in the US versus ERP/CRM at ~75%+) but is poised for growth in the coming years, estimated to grow at a 25%+ CAGR as companies continue to digitize online storefront and supply chain operations. Historical PIM providers were born well before the E-Commerce era and are not datacentric/extensible, nor are they easy to use/implement for a non-technical user. The most successful PIMs in market (Salsify and Akeneo) do best upmarket where enterprises have robust IT teams and are willing to spend on implementation. Sales Layer’s position is unique in the mid-market and where the Company’s ease-of-use and rapid time-to-value have unlocked a tremendous opportunity. Further to the uniqueness of the solution, Sales Layer knows its ICP cold and has architected a solution with high effectiveness serving manufacturers, wholesalers and distributors selling across both B2C and B2B channels. Sales Layer’s B2B value proposition and focus is especially powerful — digitizing a previously highly manual process via a distinct product suite with powerful integration capabilities. Sales Layer represents a differentiated platform with product-leadership potential in a highly strategic and fast-growing market with ample greenfield opportunity available to the business. With continued execution, Sales Layer has a path to product and segment leadership within the B2B E-Commerce and supply chain arena.

Key Market Drivers

PIM Adoption and Penetration

• PIM market estimated to reach $59B by 2025, growing at a 25% CAGR
• US PIM Market Penetration: 23% (relative to: CRM: 74%, ERP: 78%)
• PIM CAGR: 25% (relative to CRM: 11%, ERP: 9%)

E-Commerce Momentum Continues

• E-Commerce accounts for 20% over global retail sales
• Expected to grow by over $500B between 2022 and 2023

B2B E-Commerce Momentum is Robust

• B2B E-Commerce market value expected to grow at a CAGR of 17.5% to $20.9T by 2027
• 36% of B2B companies expect an increase of up to 75% in online sales from B2B buyers

Channel Proliferation

• Supporting omnichannel commerce is cited by a key priority for senior stakeholders (Forrester)
• 83% of B2B leaders believe that omnichannel is a more successful way to prospect new business

Product Complexity

• Product complexity and number of SKUs continues to rise, mirroring more complex consumer expectations

Sustainable Commerce

• Increased demand more sustainable business practices, which starts with transparency in product data
• 90% of public companies announced carbon neutrality by 2040

Supplier Digitization

• 19% of enterprises are at an “advanced” digital maturity, compared to just 15% in 2019
• 22% of companies in a survey said that 75%+ of their purchases (including from suppliers) occur online10
• Sales Layer’s procurement use case reduces supplier product onboarding from months to hours

The Amazon Effect

• For brands to effectively compete with Amazon, they will need to adopt best-in-breed E-Commerce/logistics
• See here for PeakSpan’s thesis for E-Commerce Logistics (link)

Globalization

• The global shift to online has created increasingly diverse customer bases for today’s businesses
• Language-specific product information is becoming table-stakes

Supply Chain Connectivity

• Data-sharing in supply chain connectivity was the most used feature among respondents in a recent survey
• 58% of respondents are using / piloting a data-sharing platform to unite fragmented ecosystems