Morning Brew

Kate Connors
October 4, 2021
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Originally posted on Morning Brew, read the full story here.

For DTC brands that want to link up with “like-minded” companies, where do they go? The cofounders of Canal want it to be their startup, which emerged out of stealth today.

  • The company, started by Bennett Carroccio, Liam Kinney, and Clay Schubiner, raised $4.5 million in seed funding in March; Andreessen Horowitz (Connie Chan) and Forerunner Ventures (Brian O’Malley) led the round.

The details: Canal isn’t for consumers, but a Shopify-esque platform that empowers existing storefronts to sell products from suppliers with a similar ethos—like a dating app for brands that connects them with a perfect match. Think a kettle brand selling coffee and tea or a chef selling cookware or dishes.

“We’re not the shelf or the products you put on the shelf. We are your access to inventory,” Carroccio, Canal’s CEO, told Retail Brew.

While dropshipping networks (like AliExpress or SaleHoo) already let stores purchase items from a third-party supplier, Canal’s value proposition lies within its “curated network” of high-quality brands, it said.

  • Some of the first supplier brands on Canal’s platform include Fellow, Hydrant, Birthdate Co., and Neuro. Haus, Dims, LesserEvil, and Clio will soon join the lineup.
  • Canal doesn’t charge a monthly or upfront fee to host products, but takes a commission when it facilitates a transaction.

Testing the waters: Between Instagram and Facebook and all the marketplaces that have popped up, brands are eyeing new distribution channels. But they don’t want to sacrifice authenticity, Canal said.

“They’re afraid of losing control of the relationship and losing control of their products and their brand identity,” Liam Kinney, the startup’s chief product officer and cofounder, explained.

  • Canal lets brands tailor their relationships with suppliers, customizing everything from price to inventory.

In good company: There’s been an uptick in more curated networks recently, but most are consumer-facing to help shoppers make sense of all the noise. (Look at the introduction of marketplaces like The Fascination, which only features DTC brands it has vetted.)—JS

Kate Connors
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