EQL - Bringing Fairness Back to E-commerce

Company & Team Introduction

EQL is a robust 3rd party raffle management system that gives e-commerce companies a platform to distribute limited items to their customers fairly. The company was founded in late 2019 by Andrew Lipp, James Boysons, and Patrick Donelan, 3 Google employees and sneakerheads tired of seeing armies of bots winning allocations to the most exclusive items with no effort. With their combined knowledge of managing massive surges in web traffic, backlinks, and marketing, they teamed up to build EQL and made it their mission to create the fairest commerce platform in the world. The founders cold-emailed Nike, one of the biggest limited-release retailers in the world, to showcase the product and ask if they needed help with upcoming releases; Nike said yes. After an incredibly successful launch with EQL, Nike started telling other retailers about EQL’s platform and launched the company into the forefront of hype commerce. The company is headquartered in Melbourne, Australia and has scaled its team to over 50 employees.

Product Overview

EQL’s platform helps companies fairly sell their in-demand limited items. Its technology can be used for various limited-release products, including coins, cars, cards, apparel, shoes, collectables, alcohol, and more. EQL gives companies scalable infrastructure to manage demand, detects bots and scammers, prevents site crashes, and tracks sales analytics, giving companies a stress-free end-to-end platform to launch limited products. Every launch by EQL is considered a “fair run” meaning EQL has run each entry through a multi-step verification process to confirm the entry was not from a bot or a malicious actor, all entries get deduplicated against the user’s unique ID tag, GDPR compliant standards, use of best-in-class security protocols, and easy entry to launches once a user’s account is verified. Another critical feature of EQL is that when customers enter a raffle and lose, the next raffle they enter from the same retailer, they will get an additional entry for each lost raffle in the past ex: 10 past raffles lost at Funko, the next Funko raffle the customer enters they’ll receive 10 extra entries. EQL currently supports 15 different markets and 9 languages.

Total Addressable Market

The total addressable market for EQL is challenging to pinpoint as the company brings their novel platform into the mainstream of the broader online commerce industry. For reference, the total addressable market for bot mitigation was ~550M in 2023 and is expected to grow at a staggering 24% CAGR through 2036, expanding the potential market opportunity to ~$5B. Industry growth will be primarily fuelled by the neverending proliferation of bots, which already accounted for over 50% of all internet traffic in 2022, up 5.1 YoY%.

Business Model & The Numbers

EQL utilizes a unique business model that monetizes both the seller and successful buyers. On the seller side, EQL charges brands a small percentage of each sale to help align incentives with their merchants. For the buyer side, customers who successfully secure an allocation are charged a small “fair run” fee based on the specific product, starting at $1.99 and most commonly ranging from 2.5-5% adjusted for expected demand and other launch characteristics. Companies also have the option to cover the “fair run” fee on behalf of their customers if they choose, and customers only pay the “fair run” fee if they receive an allocation.

Traction

EQL has quickly gained traction amongst the largest enterprises in online commerce. In 2023 alone, EQL has helped online retailers with over 5,000 launches, collecting over 3 million customer entries, giving them a fair shot at the products they so desperately desire. The company already has some of the biggest companies in the world using its platform in a range of different verticals, including Nike, FootLocker, Crocs, Sullivan’s Cove Whiskey, and Funko, helping them fight back against the ~34% of entries made by bots or malicious actors and reward loyal customers.

Competitors

EQL is one of those genuinely novel products to come to market, giving the company an incredibly favourable competitive position. There are no formidable competitors in the market solving these issues for limited-release commerce at the moment. EQL is mainly competing against massive retailers with the resources to build similar in-house solutions, but even then, it doesn't make a ton of sense for these companies. Building a scalable and feature-rich platform would take significant time and engineering resources away from the company and ongoing maintenance. Couple this with the infrequency of these limited launches and EQL’s incentive-aligned business model, which makes the company a no-brainer for most e-commerce giants. If Nike, one of the largest and most resource-rich companies in the entire world, is struggling to manage its launches, it is probably a strong indicator of the industry’s need for such a platform.

Funding

EQL has only raised one round of funding, raising a 25M AUD seed round in April 2022. Some of the most prominent names in venture took part in the raise, including Insight Partners and Austrian-based AirTree Ventures co-leading the round. Other participants in the round included 20VC, Zinal Growth, Sam Kroonenburg (Co-Founder, A Cloud Guru), and Michael Rubin’s Family Office.