As a private equity firm, Digital Fuel Capital (DFC) is in the business of choosing winners. They look for differentiated ecommerce companies that have a niche in the market that could grow larger faster with DFC's support.
Instead of having the large deal teams and small operating teams you may find at a conventional private equity firm, DFC has the numbers flipped. Their team of over 20 people on the operating side spans performance marketing, product and technology, analytics, data science, brand, and talent, all acting as resources across their portfolio of companies.
And for Brooke Newbury, senior director of product and technology at DFC, the people are DFC's key to success. “We focus on setting up the best practices, roadmaps, and processes, but we also work hard to find really amazing people—people that anyone would love to work with that aren’t just impressive, but they also have to be really humble.”
That’s also where DFC’s partnership with Shopify comes in. “This work is an interesting, nonstop challenge. Throughout those challenges, Shopify has been a partner in that rather than a faceless platform.”
As a result of partnering with Shopify, DFC has achieved value for their portfolio brands, such as:
- 20% increases in conversion rates for brands who have replatformed to Shopify
- 93% decrease in developer resources required post migration
- 35% increase in gross revenue for one portfolio company post replatform to Shopify
The challenge: Falling behind the pace of commerce
When Brooke joined DFC in 2020, she brought with her the experiences of her past roles. She worked with massive custom tech stacks, one of which had both its front and back ends built and managed by a single brilliant developer. She wrangled sites created on WordPress with WooCommerce plugins that were, in her words, “less than perfect.” And each time Adobe Commerce (formerly Magento) did another update that cost a small brand tens of thousands of dollars to continue having a functioning website, she worked alongside portfolio company teams to fix it.
More than anything, she wished these platforms had more intention behind them—especially when it came to the products they used and the custom builds they required. “Product is historically the wet blanket of any organization because everyone has these great ideas, they get fired up, and the product team shows you these amazing designs and experiences. Then comes the question, ‘When can we have it?’”
Four months? Two years? Brooke has heard it all. “I would not call that moving at the speed of innovation on the internet and especially not in ecommerce, but it’s a reality, that's often what a large business has to do.”
At DFC, Brooke has made it her focus to get leaner and work quicker—by building her own internal team, putting together amazing portfolio company teams, and bringing in the right technology partner with Shopify.
The solution: Shifting from custom to Shopify
Brooke admits that before partnering with Shopify, she was skeptical of sales calls in most cases. “I don’t really enjoy, and actively avoid, those types of calls. We were already building resources and capabilities internally. But there was a moment where I realized, ‘Oh, we can really work together.’ And since then, the team at Shopify has been phenomenal at supporting us and building to meet opportunities.”
One of the moments when the partnership clicked for Brooke was while attending Shopify Partner Summit and connecting with other attendees—from both private equity firms and other industries. Specifically, one of the other attendees had just built a standout website for their furniture brand, and Brooke was eager to learn how they used Shopify to do it. “It was interesting and lovely to meet these people that were going through similar things.”
Earlier this year, DFC also invited Shopify to their own summit. As the only vendor present, Shopify engaged in product sessions with each of DFC’s portfolio companies to explore how to unlock innovative ecommerce opportunities. But more than just talking about products, Shopify also presented as a strategic partner on how to catalyze ecommerce growth.
“Our partnership with Shopify has been incredible in allowing us to continue investing in our resources in the ecosystem and to fully leverage its features and functionality. Being able to unblock efficiently and work with Shopify on every level has been transformative.”
—Brooke Newbury, Senior Director of Product and Technology, DFC
Now bought in, Shopify and DFC consistently work together to create more value across the portfolio. DFC has a monthly meeting in which their portfolio companies can ask questions, troubleshoot ideas, and talk about platform updates on Shopify and in the ecosystem.
“There has been growth on my team around Shopify capabilities and understanding what was possible. And I have seen growth on the Shopify side in terms of what is actually possible, functionality we had to build custom four or five years ago is now often something we can build within the Shopify framework.”
—Brooke Newbury, Senior Director of Product and Technology, DFC
It’s that mindset shift—from building custom to working with Shopify to push the boundaries of what the platform can do—that has made all the difference for DFC.
Cleaning up the operations
With many of the companies that DFC adds to their portfolio, there’s often the opportunity to evolve the technology to improve flexibility and speed, or to reduce total cost of ownership. Take Guild Brands. This multi-brand platform of online retailers sells artist-made products, and consists of two main brands—Artful Home and Uno Alla Volta. They had a custom-built enterprise resource planning (ERP) system that predated the web, and a legacy Magento (now Adobe Commerce) site that they had poured hundreds of thousands of dollars into per year to keep running.
Digital Fuel and Stephen Bock, vice president of technology and digital product at Guild, determined that Uno Alla Volta was the best place to start simplifying. With a team they’d amassed specifically for this project, DFC and Guild moved the brand onto Shopify using a theme and the platform’s out-of-the-box apps and integrations.
The business improved immediately. In the first 90 days after the switch, Uno Alla Volta saw a 45% increase in conversion, a 35% increase in revenue, a 48% increase in transactions, and a 9.4% decrease in bounce rates—largely thanks to the features like Shopify Checkout that have made the site so seamless. “What it really came down to was being able to navigate the page, and having the freedom to choose the payment method you want,” said Brooke. “Adding Shop Pay was a big part of that.”
DFC also saw growth opportunities with Renovation Brands. The multi-brand platform of nine home improvement companies had three sites on a headless instance of Magento, with a clunky integration to accelerated mobile pages (AMPs) that didn’t have plugins for anything, including basics like reviews or recommendations.
Once on Shopify, that all changed. Over the course of two years, DFC partnered with the Renovation Brands teams to migrate multiple sites to Shopify. Shopify's built-in automation and apps have freed up the team to focus more on enhancing the sites, rather than just maintaining them. They also enjoy the flexibility to seamlessly integrate and switch between various apps as needed. Looking at the overall costs—from interchange rates and fees, to resources, complimentary tools, and services—Shopify has also proven to be more cost-effective.
“Now they're running all of these unique, beautiful businesses with unique, beautiful sites,” said Brooke.
It’s these kinds of successes that play into DFC’s consideration to acquire new brands. With lower resourcing needed to manage sites and the opportunity to improve conversion rates through UX/UI improvements, partnering with Shopify helps equip the firm to create more value in the portfolio.
Leaning into technical features
Beyond the strategic support that DFC gets from Shopify, having access to so many features makes building sites for their specialty portfolio companies seamless.
“Some of our portfolio companies have really technical products where gaining an edge in the market means being able to showcase all of those technical aspects—be it through detailed photography, or the certain texture of a closure or button,” said Brooke. “And then being able to zoom out and have all of this product data that’s really comprehensive and usable in ways that are more static, or are product by product—those have been extremely valuable features for many portfolio companies.”
Take Seattle Coffee Gear. As a company that supplies everything to make the perfect espresso, there’s a lot that goes into each of their products. One machine could have eight different kinds of heating systems, each very meaningful in terms of how quickly it heats, how many drinks it prepares, in what period of time, and more.
The challenge for DFC was to build websites that capture these nuances. Using Shopify’s metafields and metaobjects, they built custom data for product features like temperature controls, milk systems, and programming to both differentiate their espresso machines for consumers and allow them to easily track them internally.
With each of the companies that DFC invests in, they pay close attention to the details that will make their ecommerce experiences stand out. And with Shopify, they can now build highly specific sites instead of having to go custom.
“For example, even with our sites that aren’t on Shopify, we’re using Shop Pay. The conversion, the adoption, the ease of use—Shop Pay provides incrementality.”
—Brooke Newbury, Senior Director of Product and Technology, DFC
When DFC wants to push the boundaries—like with their most recent work partnering with Johnii Barbarino, head of product at Jaxxon—they also lean on Shopify. For this men’s jewelry brand, it’s all about the presentation. They wanted to showcase what their consumers cared about—on-trend products that elevate their style. And while Jaxxon was already on a headless instance of Shopify, they moved to Shopify Hydrogen as part of their site redesign for an even more elevated experience and tech stack.
The result was a highly optimized, mobile-first site that reflects Jaxxon’s customers. With thumb-friendly navigation, the new site features an elevated visual design, a discovery page with curated aspirational content, and a quiz that offers specific chain recommendations. Additionally, the move has allowed Jaxxon to access reporting, extend into international markets, and most importantly, achieve 50% year-over-year growth that’s accelerating, rather than slowing down.
The results: Boosting conversion while lowering developer costs
In private equity, when portfolio companies succeed, the firm succeeds. And the partnership between Shopify and DFC has had plenty of successes.
First off, Shopify has allowed DFC to drastically reduce development resource needs across the portfolio. For a $30–50 million business with a site on Adobe Commerce, a company would typically have at least a couple of developers. For a more complex business, that number could go up to five. And with a fully custom platform, like many that DFC used to build, they’d allocate up to seven developers. Now, when they migrate companies to Shopify, they’ve found they only need roughly one half a developer resource per site, depending on velocity needs.
In brands across the portfolio, DFC has also increased conversion rates by an average of 20%—and those increases have stuck, thanks to improvements in both the tech stack and UI through continuous A/B testing.
“A move to Shopify gives brands the advantage of an optimal checkout, and this has been an important lever for us to increase conversion rates."
—Brooke Newbury, Senior Director of Product and Technology, DFC
While Shopify initially caught Brooke’s eye as a powerful ecommerce tool, it’s the partnership that’s really shown its value. “Would I say we would still be using Shopify as a tool without the partnership? Yes. But would we be trying to figure out the cool, interesting, next-level things that we’re trying to figure out? No, we probably wouldn’t be doing that,” said Brooke. “Because Shopify has our backs through wonderful people and strong partnerships. It makes all the difference.”
These next-level projects come in all forms. As part of retheming National Tree Company’s website on Shopify, DFC looked to add a bit of holiday magic. Soon when someone goes to buy a Christmas tree on the site, they’ll have made it snow on the homepage.
Then there’s the project that Brooke can’t even talk about yet. What she will say is that it’ll be a Shopify Hydrogen React site implementation with a data management platform to identify users—and it’s going to swipe like an app. “It’s going to push the boundaries of what people think a website is,” said Brooke. “And innovation like this is made possible through our strong partnership with Shopify.”
