Raleigh-based e-commerce startup raises $5M from investors, plans hiring spree
Hip eCommerce, a Raleigh startup that helps people buy and sell collectible items online, has raised $5.3 million from investors, the company said Thursday.
The money will help the young company, founded in 2016, significantly expand its workforce in the coming months.
Hip eCommerce operates in three specific collectible markets: stamps, postcards and comic books.
Its founder and chief executive officer, Mark Rosenberg, got the idea for the company after seeing how hard it was for his father, an avid stamp collector, to sell and buy rare stamps on eBay, once the dominant player in e-commerce.
By catering services specifically to individual marketplaces, rather than a one-size-fits-all approach like eBay, the company has been able to add services that have gotten collectors to ditch eBay for Hip eCommerce.
“Collectibles are such a huge market, with more than $200 billion sold every year,” Rosenberg said in a phone interview. “But the way it is sold is different for each category. My whole idea is if you built specific markets for specific collectibles, you could create better experiences.”
The startup’s algorithms and search functions are specific to individual markets. This allows Hip eCommerce to make it much easier for collectors to find exactly what they want rather than wade through hundreds of unrelated products.
It has also added an image recognition software for comic books that has made it much easier for people to upload information about their comic books.
Many comics stores have tens of thousands of books they could be selling, but haven’t listed online yet because of how time consuming it can be to upload their details to the internet.
Hip eCommerce’s software allows someone to just take a photo of a comic book, and the technology fills in all the relevant details for the seller.
“It’s three to four times faster than going through eBay for example,” Rosenberg said.
That has allowed the company to scale pretty quickly. In 2017, Rosenberg said, the company had $400,000 in sales and five employees.
Now it is doing around $20 million in annualized sales and has around 25 employees. Rosenberg added that Hip eCommerce has now turned a profit for the past five months.
The company has been based in a downtown Raleigh WeWork until recently, but it is now operating completely remotely because of the COVID-19 pandemic.
“We have decided to go remote indefinitely,” Rosenberg said. “We are hiring the best people we can find wherever they are.”
With the new round of money, led by Austin, Texas-based Next Coast Ventures, the goal is to double sales, bring on 40 more employees and add more useful tech for customers, like inventory management.
Scot Wingo, the former CEO of the Triangle e-commerce company ChannelAdvisor, said the company has a chance to be pretty big, especially if it keeps expanding the verticals it operates in.
Wingo, who now runs the mobile-car-servicing startup Spiffy, is also a director at Hip eCommerce. The company’s board of directors includes several e-commerce veterans, like David Kalt, the founder of Reverb.com, and Cotter Cunningham, of RetailMeNot.
“A lot of companies have built large businesses off categories of eBay,” Wingo said of Hip eCommerce’s fast growth.
Just look at Etsy, Wingo said. That company is a marketplace for hand-crafted items, and people told them they were too niche to thrive, he said. Now they have a market capitalization of $17 billion.
“What you learn is that these niches on the internet are not niches,” Wingo said.
While they have the potential to expand past their current focus on stamps, postcards and comic books, Rosenberg said they don’t want to lose sight of their expertise.
The goal at the moment, he said, is to go deeper into their current categories rather than search for new ones.
But clearly there is more in store.
“For every single collectible,” Rosenberg said, “I want to know who has it and who wants it, and then bring them together with technology.”
This story was produced with financial support from a coalition of partners led by Innovate Raleigh as part of an independent journalism fellowship program. The N&O maintains full editorial control of the work. Learn more; go to bit.ly/newsinnovate
This story was originally published October 29, 2020 at 8:00 AM.
