Woolworths has taken an equity stake in tech start-up Marketplacer and will launch its own online marketplace later this year.
Woolworths has taken an equity stake in tech start-up Marketplacer and will launch its own online marketplace later this year.

Woolworths to launch online marketplace

Woolworths has taken an equity stake in tech start-up Marketplacer and will launch its own online marketplace later this year.

The new marketplace will initially sell general merchandise typically offered by its Big W chain, followed by a broader offer that includes food and groceries.

Woolworths is the latest retailer to jump on the online marketplace bandwagon, with some of the country's biggest chains inlcuding Myer, Bunnings and surfwear brand SurfStitch diving into the retail platform to attract more shoppers to their sites.

Woolworths is preparing to launch a marketplace offering on woolworths.com.au to improve its range for customers in the near future. Woolworths.com.au will initially pilot an extended everyday needs range with BIG W later this year. This will help Woolworths gauge customer demand for an expanded range, while allowing it to test delivery logistics with another retailer in the group, the supermarket giant said on Thursday.

Woolworths will back that move up with an investment in the fast-growing online marketplace creator, Marketplacer, by deciding to invest in its most recent capital raising which has seen it gather in as much as $30 million from new investors.

Woolworths venture capital arm, W23 has decided to pour money into Marketplacer to become a minority shareholder. W23 was set up in 2019 and directed by Woolworths chief executive Brad Banducci to forge new revenue streams and invest in new retail disruption platforms.

Woolworths would not disclose the size of W23's investment in Marketplacer.

An online marketplace allows a retailer, such as Woolworths, to sell a broad range of goods online that it doesn't stock in its stores or own, but can sell on behalf of third parties or other suppliers, meaning it can sell specialist or niche products that it otherwise wouldn't.

Markeptplacer was founded by childhood friends Jason Wyatt and Sam Salter in 2016 and it has quickly built up a strong list of clients like Myer, Metcash, gourmet food delivery site Providoor, SurfStitch and BikeExchange, as well as high profile investors such as JayCo founder Gerry Ryan, Acorn Capital and Salesforce Ventures. The board of directors of Marketplacer includes Mr Ryan's son Andrew Ryan, James Douglas of Acorn Capital and former Coles Myer and Foster's Brewing CEO Peter Bartels.

Marketplacer co-founder and executive chairman Mr Wyatt said as the tech start-up extends the Marketplacer offering globally, partnerships are key to its own growth.

"To that end, we're thrilled to count iconic retailer Woolworths as both a Marketplacer client and investor. This deeply collaborative partnership will see our team and technology drive a monumental digital transformation moment for the brand, while also supporting our own ability to expand, simplifying growth for businesses the world over."

Mr Wyatt said Marketplacer was recording fast of revenue growth but was not profitable as yet. He said the start-up could investigate an IPO next year.

The funds raised in the most recent capital raising, which included an investment by W23, would be directed to further growing the business including a recent launch in the US where it was ramping up its operations.

W23 managing director Ingrid Maes said the investment in Marketplacer by W23 reflected its strategy to invest in innovative start-ups that accelerate Woolworths' ecosystem strategy, and where long term win-win partnerships are an inherent advantage for both parties.

"Marketplacer is a leading platform for an increasing number of global retailers exploring third-party marketplace strategies, and will play a key role powering our own digital improvements."

W23's other investments to date include delivery service Sherpa, consumer brand builder Eucalyptus, food-tech start-up Spoon Guru and online advertising and search business Longtail UX.

Originally published as Woolworths to launch online marketplace, invests in start-up

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