From start-up to success: 5 eCommerce businesses that built everything from nothing

Here at James and James, we love to celebrate success stories.

That includes our clients, our staff, and sometimes, ourselves. But we also like to look at the wider industry and take stock of who’s successful, and how they got to where they are.

Today, we’re taking a look at 5 eCommerce businesses that started small and built something huge. It’s a reminder to ourselves – and hopefully our readers – that anything is possible with the right attitude, determination, talent, teamwork, and of course, ideas.

From fresh food fanatics to gurus of a good night’s sleep, here are the stories of 5 hugely successful eCommerce businesses that built everything from nothing.

Klarna

The Klarna logo has become something similar to that of Visa’s or Mastercard’s, in that we see it on almost every online check-out.

Klarna isn’t just a handy way for you to buy the stuff you want now and pay for it later; it’s also a seal of approval that whoever you’re buying from is legitimate.

It’s up there with the likes of Spotify, Skype, and King as one of Sweden’s ‘five unicorns’; AKA the country’s most successful companies.

But this story didn’t begin on some glamorous top-floor office in Canary Wharf, nor was it built by a group of banking dinosaurs that knew the industry inside out. Nope – Klarna’s tale begins with two teenagers working at Burger King.

Between cooking fries and flipping burgers, co-founders Sebastian Siemiatkowski and Niklas Adalberth had plenty of opportunities to discuss all manner of things, including business ideas.

Then, while studying at the Stockholm School of Economics, Sebastian and Niklas met Victor Jacobsson. Together, they hatched a plan to create a revolutionary fintech company, and excitedly entered their idea in the school’s annual entrepreneurship award. The judges weren’t quite as enthusiastic, and the trio came in second-to-last place.

A lot of people would’ve probably stopped there – but not these three. In 2005, while taking a year out from studies, they founded Klarna (or, as it was known then, Kreditor).

For their business model to work, Klarna needed big commercial clients. However, they quickly realised that folks in the business world were unlikely to take three graduates with no experience in the financial industry very seriously. Famously, they bought expensive suits and switchboard-mimicking phone numbers to try and create credibility in the fintech market.

We’ve always known that trust would be a crucial component in our business and in the beginning we believed it would be really difficult to achieve this as we were three young guys without any “real” finance experiences. – Sebastian Siemiatkowski, Co-Founder

In the end, it was their dogged determination, resilience, and genuine belief in their product that got the ball rolling. An angel investor, seeing the potential in both the business and individuals behind it, descended from the heavens to give Klarna a chance.

From there, they were able to construct a team to build the platform that would support Klarna going forward. With the foundations firmly established, they began to garner interest from Swedish clients, and by 2010, they’d secured several further rounds of investment and began expanding into Europe.

Fast-forward to 2022, and Klarna is a household name in eCommerce. They’re now offering much more than a buy now pay later scheme – such as credit cards – and are on the way to becoming a full-fledged bank.

And while their commercial value may have taken a hit recently, we doubt Klarna is going away anytime soon.

Simba Sleep

As we all know, you can’t put a price on a good night’s sleep. The founders of Simba obviously agree, as they’ve been on a mission to create the most comfortable mattresses on the market.

Simba is a relatively new eCommerce brand on the scene. Founded in 2015 by Steve Reid, James Cox, Andrew McClements and Harry McClemen, the four founders were entering a space already dominated by a number of mattress giants.

Although a number of brands were already selling mattresses, the Simba founders believed that the offerings that existed at the time were old-fashioned and that the industry as a whole was in need of innovation.

To develop their product, market research was needed. Everyone needs a good night’s sleep, and so there were plenty of places to gather information. In the end, researchers at Simba analysed the body profiles of over 10 million people to better understand what was required for their mattresses.

We were looking for a real-life problem to solve… We wanted to come up with a product that was not only good value, but pioneering. – Steve Reid, Co-Founder

They worked fast. Within the first year of business, Simba sold their first hybrid mattress. Over the next few years, they went on to secure £58million of investment from big names, including the co-founder of Innocent, Richard Reed.

Simba took a very specific strategy when approaching investors. Rather than trying to secure funding from venture capitalists, they initially wanted to work with successful entrepreneurs who had already built huge businesses from scratch. They felt that these kinds of people would be able to bring the best ideas to the table.

The most important thing to them when approaching investors was to ensure that their product was the best it could be. Although finances were, of course, very important, they understood they needed a product that could solve genuine problems for customers. As new kids on the block in a pretty stacked industry, this was especially true.

Now we’re in 2023, Simba is one of the most popular mattress manufacturers in the UK. While their mattresses remain their signature product, they’ve expanded their offerings to include all the nighttime essentials such as beds, bedding, pillows, and more.

It’s not just customers in the UK that get sleepy; Simba has also expanded into Europe and the United States, with further expansion in the works.

Ultimately, Simba Sleep shows us that taking the time to truly understand your customer’s needs is a surefire way to building the business of your dreams.

HelloFresh

If there’s one thing that’s just as important to many people as sleep, it’s food. HelloFresh are a fresh food subscription service who deliver their customers a bundle of fresh food and tantalising recipes straight to their door every week.

Founders Dominik Richter, Thomas Griesel, and Jessica Nilsson started the business in Berlin, Germany in 2010. It was a start-up in every sense of the word, reflected by the fact that the founders selected and hand delivered everything to begin with.

“We saw the golden window of opportunity to conquer untapped online space – the online grocery market – that was ripe for disruption, especially as supermarkets struggled to adapt to e-commerce realities.” – Dominik Richter, Co-Founder

After receiving an initial round of funding, HelloFresh started to deliver the first iteration of the meal kits we know today in 2012. By 2015, they had gone on to secure several additional rounds of funding and had been valued at $2.6billion, officially making them a unicorn company.

HelloFresh’ Scale Up journey has been nothing short of impressive. Rather than taking on one territory at a time, they opted to pursue an ambitious global expansion programme just a few short years after delivering their first kit.

They didn’t become profitable overnight; it took significant investment in supply chain infrastructure and production capacity before the dial began to turn green.

And while HelloFresh received immense investor backing to help build where they are today, there’s much more to the recipe of this success story.

Smart branding, aggressive marketing, forensic consumer research, continuous product development, and much more has placed them where they are today.

Not all of their success has been achieved in a glamorous way, with INC naming them “The World’s Most Ruthless Startup.”

Although you’d be hard pressed to find anybody who hasn’t heard of HelloFresh in modern times, the company is far from slowing down on the continuing quest for global food domination.

In attempts to change the way consumers buy, eat, and enjoy food, HelloFresh are looking to use their well developed infrastructure to continue expanding their products into new territories, and even have their eyes set on the ready to eat market.

Anyone hungry?

Meesho

You might not have heard of Meeso… yet. But as another unicorn company to make the list, the growth journey of this Indian eCommerce startup is nothing short of extraordinary.

Vidit Aatrey and Sanjeev Barnwal, two Indian college graduates, founded the business at the tail end of 2015.

Fashnear, as it was originally called, was set up with the intention of being a fashion platform that would allow local stores to register products on their app, giving consumers an opportunity to purchase garments online and have the items delivered to their doorstep.

However, it quickly became apparent that their business model wasn’t quite right, as buyers were more interested in getting a good deal than shopping with a local store.

Rather than accepting failure and stopping there, Aatrey and Barnwal went back to the drawing room and created Meeso. The goal was still fashion, but with a different approach.

Rather than connecting consumers with local stores, Meesho endeavours to connect buyers with entrepreneurs selling goods on social media platforms.

The goal was to give resellers the ability to sell on goods without needing to invest significantly in operations, fulfilment, customer service, and other overheads. Meesho takes care of all logistics, payments, and even sends the buyer real-time updates on the status of their orders.

In addition to providing a safe, secure, and convenient service to both consumers and sellers, Meesho has also achieved something even more significant.

According to the company, a large number of Meesho’s 13 million entrepreneurs are women. In a culture where it’s more difficult to have financial independence as a woman, Meesho is enabling women to carve their own path via making money online.

There’s a lot to be learned from Meesho, whether that’s spinning a failure into a resounding success, or showing that businesses have the power to do a lot of good in the world.

While they’re not operating in the West just yet, we’re confident that we might see the Meesho app popping up in our regions pretty soon.

THG (The Hut Group)

THG, formally known as The Hut Group, is a UK eCommerce giant in every sense of the word.

Starting out as a humble entertainment retailer, THG are now one of the UK’s biggest companies, operating as an ecommerce retailer, marketing agency, hosting provider, software developer, fulfilment partner, and more.

Specialising in health and beauty products, THG sells a wide range of goods through both first-party and third-party brands. In addition, they also provide a wealth of additional services for their partners to help them sell products online.

But it took time, commercial prowess, risk, and a good deal of learning for THG to get where they are today.

Founded in 2004 by Matt Moulding and John Gallemore , The Hut Group made business by reselling CDs, video games, and other entertainment products in popular UK brick and mortar stores including WHSmith, Tesco, and Argos.

It was a very different business to the one we know today, and for a while, it was successful.

However, by 2007, the smartphone had started to take off, giving consumers access to a wide range of quality deals right at their fingertips, and so traditional physical sales began to suffer.

It was The Hut Group’s willingness to adapt that paved the way for their success. Rather than resisting the tides, they moved with them.

So, using the capital they’d built off a successful few years of trading, The Hut Group acquired several eCommerce businesses to tap into the thriving eCommerce space. They also developed their own technology to facilitate the sale of goods online.

“We took on two developers – with money I barely had – and built our own platform. As soon as we did so, our sales doubled.” – Matthew Moulding, Founder and CEO.

They focussed on health and beauty brands for the potential of high margins and cheap fulfilment costs. These two factors would allow them to scale their business internationally at speed.

This was the beginning of what THG would go on to become; a powerhouse health and beauty retailer.

Over the next few years, they secured a wealth of support from high profile investors such as a former chief executive of Tesco, and the chairman of Ocado.

In September 2020, THG became one of the largest ever businesses to float on the London Stock Exchange. After the flotation period ran its course, THG raised a whopping £1.8billion.

The monumental success of THG reminds us that sometimes, we must adapt to come out on top.

What are your growth aspirations?

Many entrepreneurs dream of having the same success as the businesses we’ve discussed today. But if there’s one thing we’re all lacking to achieve our dreams, it’s time.

That’s where outsourcing your fulfilment to a company like James and James comes in. We specialise in fulfilment for scalable, fast-moving industries like these.

By letting us take care of storing, picking, packing, and shipping your goods, you get time back for all the growth essentials, whether that be marketing, networking, product development, and more.

Whether you’re seriously considering fulfilment or just want to learn more about the benefits, we’d love to chat with you.

Setting up a no-obligation call takes 30 seconds, and you can do it here.

Who knows, it could be the first step in something truly wonderful.