U.S. retail spending picked up last month, according to the Commerce Department, rising about 2% from August to continue five months of retail sales growth following huge declines in March and April. The pandemic has led to a big shift in where shopping is taking place. A record 15% of all retail spending occurred online last quarter, compared with about 9% during the same period last year.
That has been good news for other New York startups focused on e-commerce as well. SoHo-based Warby Parker, the direct-to-consumer online eyewear retailer, raised $245 million in August. Attentive, a text-marketing company that is based in the Flatiron District, raised $230 million last month.
For Rokt, the allure is its software, which is built around last-minute offers as a person is ready to make a purchase or has just completed one.
Someone booking a room in Midtown on Hotels.com, for example, could be directed via a pop-up ad to check out Broadway tickets on Ticketmaster, or to book a nicer room at a discount. If the customer follows through on the offer, Rokt gets a commission. Brands also pay a marketing fee to be on Rokt’s marketplace, which could connect them with new customers shopping on other websites.
Not all parts of Rokt’s business have thrived since March.
“We have some clients that have doubled their business in months: online retail, subscriptions, food,” Buchanan said. “But if you are in entertainment or travel, it is incredibly negative.”
Revenue dropped 65% for Rokt in the spring but has recovered since to the monthly levels the company projected at the start of the year.
Buchanan launched the company in 2012, after spending four years as CEO of Jetstar, a low-cost airline in Australia. Rokt has a large presence in Sydney and opened its U.S. office in 2017 in New York—which has since become its global headquarters. Buchanan lives in Brooklyn.
The venture investment will expand Rokt’s product and engineering teams ahead of a potential public offering in the next 24 months, he said. With many small businesses moving their operations online, the company has launched a version of its software in a Shopify app, connecting it to the world’s largest online sales platform for small businesses.
