Australian technology startup EQL has raised $25 million in pre-series funding to grow its platform that protects the integrity of instant ‘hype’ e-commerce sales for cult brands and their obsessive fans.
The raise occurred with support from global software investor Insight Partners and Australian VC fund AirTree Ventures, along with a raft of notable investors including Sam Kroonenburg, Founder of A Cloud Guru, and the family office of Michael Rubin, co-owner of US basketball team the Philadelphia 76ers.
The new funds will fuel the company’s growth as it strengthens its global sales and customer teams and further develops its infrastructure and AI capabilities.
While the term ‘hype drop’ may be most familiar to sneakerheads and fashion obsessives attuned to the fast-paced world of limited edition releases, it is a practice likely to become more popular as e-commerce continues to scale.
Get daily business news.
The latest stories, funding information, and expert advice. Free to sign up.
The practice involves companies releasing limited-run shipments of products to consumers, who must purchase immediately to avoid missing out. It helps brands cultivate scarcity for their products, as well as grow a devoted and engaged customer base.
But the sales tactic also attracts bad actors. Launch problems include sites crashing, payment chaos created by demand, or backlash sparked by scammers and bots clearing out stock.
That’s where EQL enters the equation.
Founders Andrew Lipp, James Boysons, and Patrick Donelan — all ex-Google executives — started the business after the team sent a cold email to Nike Europe pitching their software aimed at delivering fairer launches.
Following an accelerated sprint, the software was used to support the launch of a Jordan sneaker collaboration with a French designer.
The platform’s complex technology integrates scam and fraud detection, along with smart payments capabilities that ensures fair and transparent sales can occur amid rapid transactions.
While its earliest customers were in the sneaker space, EQL now also supports luxury brands across apparel, alcohol and accessories, and plans to soon expand into gaming, ticketing and the digital collectives (read: NFTs) space.
‘E-commerce has changed’
EQL started from a desire for fairness, co-founder and chief executive officer Andrew Lipp tells SmartCompany.
The trio of avid sneaker fans were sick of missing out on limited edition sneaker drops and wanted to create a platform a raft of companies from cult streetwear brands to high fashion houses to whisky companies could use to ensure integrity.
As e-commerce becomes a core sales channel for retailers, companies need to account for the many ways this can take place, Lipp explains.
“You’ve got social commerce, you’ve got the creator economy.
“Hype commerce is becoming a very prevalent wedge of e-commerce; you’ve got scarce goods, which is how a lot of retail brands are now selling,” he said.
The consequence is existing platforms — including those built by retailers — can’t handle this new level of complexity. It means brands and their loyal customers lose out on a shopping experience that helps companies maintain integrity and build trust.
“E-commerce has changed,” Lipp said.
“Ultimately our mission is to build the world’s fairest hype commerce; to get those products back into the hands of real fans,” he said.
New forms of digital commerce “need certain types of tools that are custom built for those for those moments”, which Lipp says is the security EQL provides.
The company has seen rapid international growth since its launch, with early adopters like Footlocker, Sullivans Cove whisky and Crocs using the platform to manage limited release product launches.
EQL has now been part of over 1000 high heat launches.
The Melbourne-based hype commerce platform is already operating in 11 global markets and plans to use the fresh funding to plant deeper roots, particularly in Europe and Aisa where many established fashion brands are based — and scarce product launches are growing in popularity.
‘Customers love it, and retailers want to deliver it’
Lipp says EQL’s meteoric rise has come from understanding how its software could best solve pain points for retailers.
The startup is focused on “building incrementally based on the need [our] customers have,” he says.
“Being able to partner with them to incrementally build the features, so that you’re always kind of delivering something that’s usable, has been really important for us.”
Lipp says the company has also tapped into a growing desire for fairness as smaller businesses compete with e-commerce giants online.
“Fairness is real,” he says.
“We love it. Customers love it, and retailers want to deliver it.”
He also credits the investors and partners the startup has aligned with, who have “either done it,” or “they have either got the skills that we don’t have,” in achieving the eye-watering acceleration they have seen over 12 months.
“You can really kind of accelerate together.
“And that’s what we’ve had.”