Israeli startup Tailor Brands announced in late July it had raised $50 million in Series C funding. American domain registrar and web hosting giant GoDaddy led the round as a strategic partner. The investment is the largest GoDaddy has made in a private company, and its first in the Israeli tech realm.
The funding round saw participation from OurCrowd, as well as existing investors Pitango Growth, Mangrove Capital Partners, Armat Group, Disruptive VC, and Whip Media founder Richard Rosenblatt. Tailor Brands, headquartered in New York and Tel Aviv, has now raised a total of $70 million since its inception in 2015.
Starting a digital business is no simple task, especially when it comes to the big role branding plays. This is where Tailor Brands steps in with an automated fix. CEO Yali Saar, COO Tom Lahat, and CTO Nadav Shatz sought to help any local business feel like they have an in-house designer with a clever algorithm that allows customers to think like a designer.
When Tailor Brands launched publicly at TechCrunch’s Startup Battlefield in 2014, they were focused on AI-driven logo creation. More than just a logo maker, the company is now a SaaS platform that provides a range of design, branding, and marketing services a small business owner needs to launch and grow their ventures, and within minutes. (Understand now why GoDaddy is interested?)
With more than 20 million customers and 7,000 employees, GoDaddy is helping business owners secure their website domains and host online sites for their companies.
“GoDaddy is empowering everyday entrepreneurs around the world by providing all of the help and tools to succeed online,” said Andrew Morbitzer, vice president of corporate development at GoDaddy, in a written statement. “We are excited to invest in Tailor Brands — and its team — as we believe in their vision. Their platform truly helps entrepreneurs start their business quickly and easily with AI-powered logo design and branding services.”
With the onset of the coronavirus pandemic, it became a necessity for local brick-and-mortar stores to set up a digital presence, and Tailor Brands’ platform helped them do so. From designing a logo, creating social media content, even designing branded products, and more, Tailor Brands is a one-stop shop for business owners.
“Once we started to really track the explosive growth of small businesses as a result of Covid, we knew that Tailor Brands could provide real value for these business owners in a fun and engaging way by removing many of the hurdles that come with establishing and marketing a new business, including consolidating all of the needed services in one place, enabling business owners to free up valuable time to focus on other important aspects of growing their companies,” said Saar. “We are thrilled to have this vote of confidence from GoDaddy and our other investors as we continue on our growth trajectory with Tailor Brands’ unique position in the growing SMB economy.”
Over the past year, more users have flocked to Tailor Brands; the company has over 700,000 new users per month, and has seen a 27% increase in new business incorporations as the creator and gig economy gained traction in 2020.
In addition to the record number of new users, the company surpassed 30 million businesses using the platform. At the end of 2019, Tailor Brands started monetizing its offerings and “grew at a staggering rate,” Saar said. The company yielded triple-digit annual growth in revenue.
To support that growth, Tailor Brands will allocate the funds raised to accelerate its service with a broader range of capabilities and functions offered on its platform by investing in R&D, to double the team, and to expand marketing efforts. There may be future acquisition opportunities on the table, as well.
Saar said Tailor Brands is at a point where it can turn the platform into a “consultant of sorts” to guide customers through the next steps of building their business.
“Users are looking for us to provide them with everything, so we are starting to incorporate more products with the goal of creating an ecosystem, like WeChat, where you don’t need to leave the platform at all to manage your business,” Saar said.