Shop Circle has announced the extension of its Series B funding round to a total of $100 million, combining $60 million in equity with strategic financing.
Shop Circle focuses on scalable, operationally critical software and is expanding its enterprise offering through targeted acquisitions and disciplined execution across product innovation, AI, and go-to-market. Its tools drive engagement and conversion, as well as internal operations, spanning both the interaction and efficiency layers of the modern software stack.
As Shop Circle evolves, it is becoming an AI-first acquirer, focused on delivering post-acquisition operational excellence across its portfolio. I spoke to Luca Cartechini, co-founder and CEO of Shop Circle, to learn more.
Shop Circle aims to build the leading European software platform powering the infrastructure of modern enterprise.
"We want to acquire outstanding B2B products and scale them: applying AI to automate operations and lift margins on one hand, and strengthening go-to-market and partnerships on the other," shared Cartechini.
Efficiency is Europe's competitive edge
Cartechini asserts that while it's difficult for European companies to compete one-to-one with Silicon Valley on innovation — they can afford to pay developers millions of dollars — what Europe does better is efficiency. This is why several acquisitive software companies have emerged locally in the past few decades, scaling successfully through a purely acquisitive path such as Visma, TeamSystem, and Bending Spoons.
"They've grown into far more than unicorns; they've become some of Europe's most important tech players. We believe you can build some of the greatest technology companies in the world from Europe, following a similar model," shared Cartechini.
Europe's software market is vast, but IPO potential is slim
Europe is home to nearly 13,000 software companies making over $10M in annual revenue, and around 4,000 are above $50M. According to Cartechini, only one or two per cent have the potential to go public, while the rest are better suited to remain independent or become part of a platform like Shop Circle.
"Europe's market is very fragmented. Compared to Silicon Valley, there are fewer companies raising capital — and I think that's a good thing.
The problem with raising capital is that once you do, you can't go back. If you can't get to $100M ARR or more, you're stuck with liquidation preferences and investors pushing you to scale at all costs.
Statistically, it's almost impossible in Europe for a standalone software company to reach $200M ARR."
Cartechini recalls his time in equity research covering listed tech companies:
"The IPO threshold used to be around $100 million in ARR. Now it's closer to $500 million—out of reach for 99 per cent of venture-backed companies in Europe. Frankly, many of them should never have raised money in the first place."
Still, he argues, those companies can build great products and capture value by joining a larger platform.
"We're seeing more and more opportunities—both from bootstrapped firms that grew sustainably and from those that raised a round or two before realising that partnering with a larger group would help them create something more meaningful."
An AI-first playbook for acquisitions
Shop Circle is still young — just four years in — while many of its peers have been building for 15 to 25 years. But over the past four years, Shop Circle has acquired 16 companies. Yet Cartechini notes a cultural difference compared to other firms pursuing a similar acquisition model:
"Our edge is applying AI and taking a product-led operator approach. We are product- and people-first operators. Around 70 per cent of our team are technical developers, engineers, and product people.
We're not a private equity firm. We have dedicated AI teams focused on automating operations and increasing margins across our portfolio, which enables us to adopt an AI-first, acquisitive business model."
One of Shop Circle's playbooks is embedding AI post-acquisition to expand margins.
It builds or adopts tools that automate repeatable tasks in HR, marketing, finance, and support.
"That quickly lifts margins — we're already running at more than 25 per cent EBITDA across the portfolio, shared Cartechini.
When evaluating acquisitions, Shop Circle focuses on fundamentals: net dollar retention, churn, EBITDA, and cash flow.
"Churn is especially important in AI because no one yet knows how sticky these tools are. Most companies we acquire have usually been around 7–10 years, with proven product-market fit and strong cohorts.
Typically, we target companies with $2M–$10M ARR and a clear path where we can take them from two to ten."
For example, as part of this evolving strategy, Shop Circle has recently acquired KrakenD, a high-performance API gateway that simplifies and accelerates data delivery.
The four pillars of Shop Circle's acquisition model
According to Cartechini, Shop Circle has consistently proven it can improve their performance post-acquisition with a repeatable playbook that combines operating leverage, AI integration, and vertical expertise.
"We now serve more than 130,000 paying customers, which gives us strong visibility into what works in B2B SaaS. It comes down to consistent execution, supported by metrics — including revenue, EBITDA margins, and growth — and a proven business model."
Cartechini argues that Shop Circle approaches acquisitions differently in four key ways.
First, it buys to own forever. "We're not a private equity fund. We preserve the brand, the product, and the team. If they want, they can keep autonomy and become part of a larger organisation."
Second, it centralises the backend, taking over finance, legal, HR, and customer support — "the things founders don't enjoy"— so their teams can focus on product and customers.
"By doing this, we've improved EBITDA margins almost every month.
Today we're at more than 25 per cent across the portfolio. Software companies usually have gross margins of 95 per cent, but many remain unprofitable because they're run inefficiently. With discipline and AI, you can make them highly profitable."
Third, it adds talent. According to Cartechini, each role at Shop Circle attracts more than a thousand applications. Shop Circle applies a rigorous, data-driven approach to hiring, reviewing over 45,000 applications annually to select the top 0.1 per cent of candidates with exceptional technical skills and long-term potential.
"That allows us to place world-class engineers, operators, and AI specialists into portfolio companies when needed. A 10-person bootstrap team doesn't normally have access to that level of talent."
Cartechini contends that Europe doesn't have a talent shortage.
"We have some of the best universities and engineers in the world. What we lack is capital. Our model allows us to combine Europe's talent base with the scale and capital needed to grow."
And fourth, it provides access to our customer base and network:
"We don't merge products because that's messy, but we give portfolio companies access to 130,000 customers and hundreds of consultants in GTM, product, partnerships, and pricing."
Often, the founder becomes GM of the acquired company. They maintain autonomy on product development but benefit from central support. In some cases, they even go on to lead a business unit within Shop Circle, with their own M&A budget to consolidate other products.
Cartechini asserts that it's crucial that transactions are fair and that founders see their companies not only preserved but actively scaled.
"That's very different from the horror stories many founders have heard."
Shop Circle's business model has resonated strongly with investors — this is the company's fourth round in four years, each at a higher valuation.
Nextalia Ventures led the round, which included a mix of European and US investors, including existing backers, Primo Capital and CDP Venture Capital, alongside new strategic investors such as 645 Select Fund, which invested through its designated vehicle, FNDX, FG2 Capital, and entrepreneurial family offices backed by leading industrial and technology groups.
“We invest through our Select Fund in the best companies of our venture portfolio, and Shop Circle has proven it has the potential to become one of the leading enterprise software companies globally. The next wave of digital transformation will belong to those who embed AI deeply into their products, pricing, GTM strategies, and internal workflows, exactly as Shop Circle is doing,” said Nnamdi Okike, Managing Partner at 645 Ventures.
"We doubled down on Shop Circle because we believe it can become one of the next leading European technology companies powering the infrastructure of modern enterprises," said Francesco Canzonieri, Founder and CEO at Nextalia Investment Management.
But for now, Shop Circle's goal is to keep building quietly and efficiently. The capital will fund an ambitious M&A roadmap, with multiple acquisitions already in advanced stages, and accelerate AI product development across the company's portfolio.
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