Shop Circle today announced an expanded partnership with i80 Group, increasing its credit facility to $100 million.
Shop Circle is a global AI-powered software platform that acquires and scales B2B software products. It operates a growing ecosystem of mission-critical tools used by over 165,000 companies worldwide.
The acquisitive model is exploding, especially in Europe, with companies such as Bending Spoons and Visma.
Shop Circle has acquired 16 companies to date. According to Cartechini, “on average, after an acquisition, we improve profitability by 15–20 per cent.”
I spoke with Luca Cartechini, Shop Circle’s co-founder and CEO, to gain deep insights into the company’s goal of becoming Europe’s leading software platform.
AI’s real impact: rewiring operations
Cartechini believes that AI is now capable of transforming the efficiency profile of software companies — especially within a holding structure.
Applied correctly, he says, it can meaningfully lift profitability across an entire portfolio.
“If you’re a holding company and apply AI properly — in an unsexy way — you can improve profitability across the whole group.
I think we’ll see much more of this model in Europe. And that’s a good thing. When something works, competition catches up.”
Cartechini argues that amid the noise of AI storytelling, the real winners will be the companies using AI to rewire their internal operations first.
“We’re really proving the AI playbook, but in a very unsexy way,” he says.
“Not cosmetic AI for investors or clients, though that matters too. But eventually the bubble will deflate, and then you’ll see who has strong fundamentals.”
Inside Shop Circle’s AI engine
Shop Circle’s first wave of AI implementation has been focused on the backend. As Cartechini explains, “In software, gross margins are usually around 95 per cent once you exclude infrastructure costs like Cloudflare or AWS. Ninety-five per cent of the remaining cost is people — and a lot of repetitive tasks.”
To tackle that, the company created a centralised automation team at the holding level to eliminate low-value work across its portfolio. The team audited the entire organisation to identify waste and high-ROI automation opportunities. “We assessed ROI and focused on very specific use cases,” he says.
“For example, we built AI agents to answer repetitive customer-support tickets. We have a team of 60 people in support. Now they can focus on real problems, and the agents handle the repetitive tasks. About 30–40 per cent of tickets tend to be the same question.”
The result: faster developers, streamlined workflows, and a clear boost in productivity. Still, Cartechini stresses that the company’s approach remains deliberately light-touch. “It’s very lean,” he says.
“We run a decentralised model for product and technology. The worst thing we could do is tell a founder who has run a company for 10–15 years what to build.”
Instead, Shop Circle removes the administrative and operational load that holds small software teams back.
“We take away the boring stuff — finance, HR, budgeting, controlling,” Cartechini notes.
“We help with AI because smaller companies can’t afford dedicated AI teams, and with B2B sales because we already have the distribution. We also support talent, because our brand can attract people they couldn’t.”
Europe can build software — it just can’t scale it
Shop Circle recently commissioned a report into the European software industry that highlighted that many European software companies succeed in innovation, but very few scale to truly global, high-revenue levels.
The report finds that while there are ~50,000 companies above $2M ARR and around 13,000 above $10M ARR, only 15–20 have reached “true global scale.” Many of those are decades-old incumbents; the rest are via buy-and-build strategies. Further, despite the large number of companies, Europe struggles to produce “champions” — global-scale firms — resulting in a largely fragmented landscape with many small or mid-size players.
Against this is a backdrop where European venture funding for software plummeted from a peak of $117 billion in 2021 to about $51 billion in 2024 — or as low as $25 billion if AI “mega-rounds” are excluded — a drop of nearly 80 per cent.
The report contends that Venture capital alone isn’t enough to produce European software giants, with the reality that fewer than 1 per cent of VC-backed European software firms ever reach $100M ARR, and virtually none make it to the $400 – 500M ARR range generally required for large-scale IPOs.
“We’re not private equity — we’re builders”
Ultimately, the report supports Shop Circle’s acquisition thesis: Acquiring smaller software firms and integrating them — potentially augmented by AI to drive operational efficiencies, could enable European firms to overcome structural obstacles to scale.
Cartechini contends that “investors sometimes think acquisitive companies aren’t tech companies — that they’re more like private equity. That’s not true. Private equity raises capital and returns it to LPs. Their teams are 95 per cent finance and M&A. They don’t run the companies.”
By comparison, Shop Circle acquires and holds forever. Eighty per cent of its people are technical — developers, PMs. “Our M&A team is only 3 per cent of the company. And after we buy a company, we run it,” shared Cartechini.
Europe needs fewer wrappers and more real companies
Cartechini argues that a large portion of Europe’s software landscape remains undervalued — particularly niche vertical tools with small total addressable markets, such as warehouse-management systems. These categories are typically “too small” for venture capital, yet mission-critical for customers.
“These are terrific companies,” he says. “No churn, extremely sticky, profitable, and hard to replace. And no one is going to compete with them because the market is too small. We don’t need them to be $20 billion companies. Our model is permanent, stable operations that generate cash.”
He is equally clear about what Shop Circle avoids.
“We stay away from AI wrappers entirely,” Cartechini notes.
“There’s no barrier to entry. Anyone can copy and paste something and call it a product.”
Instead, he emphasises the importance of long-term defensibility.
“Our real moat is continuously improving the product, owning distribution — we have 165,000 paying customers — and managing everything that comes after the code: QA, compliance, certifications, customer support, sales. Building something that looks similar is easy. Running a real company is not.”
He also questions the economic logic behind the current wave of AI-wrapper tools.
“Economically, AI wrappers are fragile. Every token costs money. And if OpenAI or another provider increases costs, you’re done. Software margins are 95 per cent. AI wrappers don’t offer that.”
And while he resists tired narratives about hype cycles, he remains cautious. “I don’t want to be the cliché European who says the bubble is inflated — but I don’t see enough evidence that these wrapper tools are sustainable.”
As Shop Circle accelerates its acquisition strategy, both the company and its investors say the expanded credit facility positions it to scale far more aggressively across the B2B software landscape.
According to Cartechini, “Following our Series B equity raise, we now also benefit from a more competitive cost of capital and a larger credit facility, which allows us to move decisively on acquiring great B2B software products and scaling them through our AI and GTM infrastructure. “
“Shop Circle continues to execute at an exceptional level, and we see them at the forefront of a broader transformation where modern software and applied AI are becoming core to daily life,” said Peter Frank, Managing Director of i80 Group.”
Shop Circle currently serves over 165,000 businesses worldwide, helping them work smarter, grow faster, and stay ahead.
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