GOSITE RAISES $40M TO HELP SMALL BUSINESSES
Startup enables firms to transition from offline to online
San Diego startup GoSite, which makes software that helps small businesses transition to e-commerce, has raised $40 million in a second round of venture capital funding.
The 300-employee company plans to use the funds to grow operations and expand its product offerings to help more small firms establish an online footprint as they adapt during COVID-19 pandemic.
“COVID has been impactful for small business all across the country,” said Chief Executive Alex Goode. “We have designed a platform that helps small business transition from off line to online. Small businesses now more than ever need a solution like GoSite to help them continue to operate their businesses.”
2020 revenue will be up 50 percent.
The Greater Knead, a gluten- and allergen-free bagel company in Bensalem, Pa., also was poised for a good year in 2020. The 8-year-old company, whose bagels are sold in bagel shops and supermarkets, had finally turned a profit, with just under $1 million in revenue. In February, sales were up 20 percent, and the business was on track to have its best year yet, said the owner, Michelle Carfagno.
But in early March, sales dropped steeply, as stores closed and customers stayed home. Supermarkets began running out of Greater Knead bagels and didn’t reorder, focused instead on stocking items like toilet paper and cleaning supplies. By May, revenue was down 60 percent. A small bright spot, however, was Internet sales, which were slowly increasing. Carfagno decided to capitalize on that and invested in social media advertising, something she had not done before, to drive traffic to her website. Now that people were staying home, they were seeking the Greater Knead’s bagels online, and she wanted to make sure they could find them.
“Before the pandemic people learned of us through word of mouth, store signage and in-store demonstrations,” she said. “All of that was gone.”
Soon after, Carfagno decided to work with a West Coast fulfillment center, enabling her to ship nationwide, something she had not considered before because of the high cost of shipping
frozen bagels. It turned out to be a smart move: By September, online sales were up 250 percent.
“We now see this as an opportunity to have a direct relationship with customers,” Carfagno said.
Anthony Casalena, founder and chief executive of Squarespace, a website building and hosting company with more than 2.5 million customers, the majority of which are small businesses, sees an increasing willingness among these businesses to try new strate
gies, including fostering a more direct online relationship with their customers.
“Companies creating new websites on our platform, and email marketing campaigns, are at an alltime high,” he said. “And ecommerce sales on our platform have doubled.”
Before the pandemic, Seattle-based Snapbar, which created custom selfie stations and photo booths for events, was the kind of company that did business over the phone and in person. Its staff members in five cities
would set up “luxe photo booths” at events like weddings and charitable galas. Snapbar also shipped “selfie stands” — easy-to-set-up photo booths that use an LED light and an iPad — for use at sporting and corporate events. At the start of 2020, the 8-year-old company was on track to more than double its 2019 revenue, which was $3.2 million.
But by mid-March, Snapbar had lost all its business, and operating remotely was not an option. During a night of panicked insomnia,
Sam Eitzen, co-founder and chief executive, came up with 50 ideas for “pivots, changes, adaptations and reinventions.” Eventually he and his brother and cofounder, Joe Eitzen, settled on Keep Your City Smiling, a direct-to-consumer site that would sell gift boxes filled with items from local small businesses in a particular city.
“We didn’t rebrand ourselves or shut down Snapbar; we just built something new,” Sam Eitzen said.
In its first three months,
Keep Your City Smiling earned $500,000 in revenue, with 50 percent to 60 percent going back to the small businesses whose products were included in each box. But as the pandemic wore on, orders plummeted and Eitzen shifted its focus again, this time from consumer to corporate gift giving. That enabled Keep Your City Smiling to stay af loat, but it did not generate enough revenue to sustain Snapbar.
During this period, however, Snapbar’s director of engineering had been intensely working on developing a product he believed could save the company: a virtual photo booth.
“Most corporate virtual events feel like lectures or webinars,” Sam Eitzen said. “We create a custom-designed and branded photo booth that lives in a link on the event’s site. So an attendee is still consuming information, but they can also engage in another way, taking a selfie at the event and posting it on Instagram.”
This pivot transformed Snapbar into a tech company. The virtual photo booth is now the fastestgrowing product it has ever had. And revenue — after the company nearly went under — is projected to be $2 million this year.
“My brother and I really struggled with this big question,” Sam Eitzen said. “After eight years of working so hard, is it better for us to put all of our savings on the line again, or do we cut our losses and let the team go? But we really love the people we work with. And that’s why we stayed in it.”