Skio, a new startup working to make it easier for e-commerce companies to sell subscription-based offerings, on Thursday said that it has closed a $3.7 million seed funding round.
The investment was led by Adjacent Venture Capital with participation from more than a dozen angel investors.
A growing number of online retailers are adding subscription offerings to their product catalogs in a bid to boost revenue. New York-based Skio, incorporated as Jika Inc., has developed a cloud service that simplifies the logistics involved in selling subscriptions.
Skio’s service is aimed at online retailers that use Shopify Inc.’s namesake cloud platform to support their operations. Publicly traded Shopify is a top technology supplier to the e-commerce ecosystem. The company operates a cloud platform used by more than 1.7 million online retailers worldwide to host their e-commerce websites, as well as manage related activities such as advertising.
Skio provides its service through Shopify’s built-in app store. Using Skio’s service, an online retailer can enable its customers to purchase subscriptions with a single click using a feature called Shop Pay that Shopify introduced earlier this year. According to the startup, the convenience of a one-click purchase workflow can help online stores increase the number of customers who buy a subscription by as much as 72%.
Skio also promises to save time for online retailers’ employees. To buy subscriptions from a retailer that uses a Shopify-powered website, users typically have to create an account. If users forget their account passwords, the retailer’s employees must provide technical assistance to resolve the issue.
Providing technical support to shoppers can require a significant amount of time and resources for an e-commerce company with a large number of customers. According to Skio, its service reduces support requirements by providing a convenient passwordless login feature for shoppers. The feature promises to help retailers avoid technical issues related to forgotten account passwords.
Skio is marketing its service as a more compelling alternative to the rival subscription management software of startup ReCharge Inc., which closed a $227 million investment in May. One of the benefits Skio promises is simpler access to updates. The startup says that retailers can access new features it rolls out to its service automatically, whereas implementing updates provided by ReCharge requires website changes.
Though it only launched in April, Skio says that more than a dozen online retailers are already using its platform. The startup currently has five employees and reportedly plans to use the new $3.7 million funding round to hire more software engineers.
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