Skio, a startup looking to ease the pain of selling subscriptions for brands on Shopify, has raised $3.7 million in a seed funding round.
Kennan Davison, an engineer who previously worked at Hulu and Pinterest, founded the startup in April.
He describes skiing as fintech and an infrastructure company as the hub of an earlier idea that had gone through Y Combinator. Skio acquires established parties such as ReCharge Payments, which has also built subscription software for e-commerce brands and valued at $2.1 billion earlier this year after a $227 million increase.
The New York-based startup helps Shopify brands sell subscriptions by managing and scheduling payments, as well as anything consumer-related in the process, such as building a customer portal to manage subscriptions and SMS subscription management, among other things.
It claims to use modern frameworks that allow it to “build much faster” than existing offerings.
“With this faster building we can do better than the current solutions with one-click checkout with Shop Pay, which leads to more conversions; passwordless login, reducing customer tickets; 10x faster subscription operation; a turnkey headless subscription portal that leads to instant loads; discounts on group subscriptions and an easy migration from ReCharge,” said Davison.
Skio must be doing something right. It already has a number of clients, including: Bev, MatchaBar, Remedy Organics, Quokka Brew, Muddy Bites, Barukas, Simulate, Red Bay, Dandelion Chocolate, Siete Foods, Doe Lashes and Backbone.
“We started at the lower end of the market with smaller Shopify merchants,” Davison told BestFitnessBands. “Now we are migrating larger customers from ReCharge.”
The entrepreneur’s experience with subscriptions dates back to high school, where he said he started skipping classes to do web development for a subscription box startup called Conscious Box. He then worked as an engineer at Hulu, where he built an app to manage subscription discounts. He then worked as a growth engineer at Pinterest, where he claims to have conducted more than 200 A/B tests to increase user conversions.
Skio is only helping merchants on Shopify with subscriptions for now, but Davison’s goal is to partner with merchants one day on ‘entire internet’.
Adjacent led Skio’s seed funding. Nico Wittenborn founded the company last year with a focus on mobile-first subscription businesses. Before founding Adjacent, Nico worked at Point Nine Capital and Insight Partners. He has supported companies such as Calm, Revolut, Prose, Oura and Reflectly.
A number of angel investors also participated in the funding, including MuteSix’s Daniel Rutberg and Moody Nashawaty, Shaan Puri, Italic CEO Jeremy Cai, Tilt co-founder and Magic Mind founder James Beshara, Julian Shapiro and Sahil Bloom, as well as company founders and executives such as Immi, Thingtesting, Taika, smile.io, Literati, Linjer, Raycon, Cresicor, Carted, Orchard Analytics, and Cohere.
Currently, Skio has five employees, but plans to use its new capital for product development and “aggressively hire world-class software engineers.”
“Since I started this solo, we’ve been in a position to give the right people significant equity,” he said.
Lead investor Wittenborn told BestFitnessBands that he’s been following the Shopify ecosystem for the past few years after making similar infrastructure investments in other growing ecosystems in the past, such as Chainalysis in crypto, RevenueCat in mobile, and OwnBackup in the Salesforce ecosystem.
“When I first became acquainted with Kennan, I noticed that he was building a foundation piece for Shopify-based subscription services and a few reference conversations with his and potential customers quickly confirmed that his product was much more promising and flexible than existing solutions,” Wittenborn wrote via email. “There is only one serious competitor, ReCharge, who seems to be comfortable with the dominant position in the market. This has led to frustration in the ecosystem and has created an opportunity for someone like Kennan to come over and shake things up with a more responsive, integrated product and better customer support.”