Shopify has long said they’re “arming the rebels” against Amazon. Now, the Miami-based startup OpenStore wants to roll these stores up.
Co-founded by Keith Rabois (a VC and Miami’s favorite hypeman this side of DJ Khaled), OpenStore raised a $30m Series A valuing the firm at ~$250m.
Similar to Amazon roll-ups, consolidation allows OpenStore to automate customer support and shipping, and unlock volume discounts.
OpenStore uses an algorithm to avoid bidding wars
The startup has a 3-step process to generate offers for merchants:
- Step 1: Merchants apply online, sharing their Shopify login credentials
- Step 2: OpenStore’s algorithm reviews sales, inventory, and other data
- Step 3: The technology comes up with an offer by the next business day
OpenStore reminds many analysts of another company Rabois co-founded: Opendoor, which uses algorithms to purchase homes (and shares a very similar naming convention).
Imitation is the sincerest form of flattery
OpenStore plans to launch a consumer-facing product to centralize the shopping experience across its merchants, which sounds a lot like… Amazon.
According to Rabois, all products are welcome, from furniture to ice cubes for soup.
Time will tell if OpenStore will succeed in its own right, but at the very least, it should give the serial VC a chance to cash out quickly and move on to his next hypeman project.