ShopIgniter CEO Matt Compton on Raising $8M and the Growth of Ecommerce on Facebook

Founded back in 2008, when social shopping was an exciting but unproven idea, ShopIgniter has been building its business among clients who have real-world goods to sell online, with a focus on Facebook. And like some of its rivals have recently, the Portland, Ore. company has raised more funding, an $8 million second round led by Silicon Valley venture firm Trinity Ventures with existing investor Madrona Venture Group participating.

The new interest is because brands that had been focused on gaining Facebook fans in past years are now looking for what do next, as chief executive Matt Compton tells us in an interview today. For many Page owners, that means selling direct. ShopIgniter has a set of interlocking products aimed at meeting this emerging need.

One is a customizable white-label application for Pages, with ways to adjust the look and feel to match the page, tools for easily sort through product offerings, and other features seen social commerce apps. The Portland TrailBlazers basketball team, for example, has been using it to sell team merchandise on its Page. Compton tells us that in a recent test between on and off Facebook sales for a brand, conversions were twice as high on Facebook.

A ShopIgniter product called the “Social Promotions Engine” reaches further into Facebook, helping Page managers create custom campaigns designed to get users sharing content about the brand on their Walls and news feeds in order to generate sales. In an example detailed by Ryan Spoon, Nike promoted a limited set of collectible golf balls to fans of its Page. The contest winners got free golf balls, and Nike was able to increase fan awareness of and interaction with the store. Finally, participants were also encouraged to share a news feed story about their winnings with friends.

For the Blazers, Compton wrote last month, promotions like these resulted in the Page fan count growing by 25% and, perhaps more importantly, transactions conversions originating with Facebook friends growing by 16%.

Beyond the application and promotions, ShopIgniter also provides a white-label ecommerce product for web sites. The point of it is to go beyond more general online ecommerce management products, instead capturing commerce around social interactions wherever they happen. For example, one customer may go to a web site, find a product they’re thinking about buying, click the Facebook Like button, and generate a story about it in their news feed. Their friend might then click to look at the product, be taken to the Page of a company with a ShopIgniter store, and buy the product there. Meanwhile, the person who Liked the product on the site might still go to the site when they decide to complete their purchase.

A variety of competitors in the business provide their own variations on social commerce applications — some we’ve looked at include 8thBridge (formerly Alvenda), which announced a $10 million second round in late May, and Payvment, which added a $6 million second round in December.

With client lists growing and venture capital firms doubling down, the non-virtual goods part of the platform appears to be coming of age. We just kicked off a series on social commerce in our Facebook Marketing Bible subscription service. Stay tuned for more.