Optaros Blogs |

Magento To Fuel Expansion with $22.5 Million Growth Capital

jkrisch — Sun, 21 Mar 2010 20:18:13 +0000

Magento, the 2009 Exciting Commerce Innovator of the Year, has secured $22.5 million of growth capital exactly two years after their launch. The capital will be used to more seriously engage the markets of the first generation behemoths: Intershop, Demandware, Hybris, etc.

Via open source distribution Magento was surprisingly able to survive the first two years without external financing. Their employee headcount has been recently stocked up and besides other diverse industry solutions, they have also announced an SaaS solution.

Within only two years, Magento has achieved a not very heralded victory in e-commerce: online shop operators have discovered Magento as an alternative to self made system solutions. For those on the leading edge, Magento is - with its flexible customization and extension possibilities - the basis system of choice.

Investor identities remain in the shadows

One negative point on the announced finance round: Magento users would have expected more transparency on the terms and conditions behind the investment ("Magento Secures Its First Investment"). If speculations from Techcrunch and others can be confirmed, that above all eBay/Paypal have been brought on board at Magento, then this would be a pretty significant headliner.

After all, in the innovation arena eBay has proved itself to be an extremely irresolute investor (see examples such as Skype and Stubhub). Furthermore, management change in the last two years has threatened its leading role in e-commerce. But perhaps there will be a clearer statement from the Magento side yet to come about which strong capital partner they have brought on board.

In any case, hope remains that the overdue wave of innovation for online shopping systems will finally pick up speed and result in a steady flow of regular investments into modern shopping solutions for the next few years.

Two other related investment highlights: Demandware received $15 million in a fourth financing round in April 2009 (and nine months later, a new CEO); Oxid eSales had for its open source push a seven figure financing round in December 2007.

Originally posted in German by Jochen Krisch, adapted for excitingcommerce.com by Jason Soo.

Zappos Grows Demand to $1.2 Billion (+17%)

jkrisch — Sun, 21 Mar 2010 11:30:01 +0000

The Amazon daughter Zappos has grown from $1 billion in 2008 to almost $1.2 billion (+17%) in 2009 (via). Due to their return intensive business model, the net revenue lies at around 62%.

Zappos top man Tony Hsieh has written in his annual report:

"We continued growing in 2009, finishing the year doing nearly $1.2 billion in gross merchandise sales."

Source: Zappos presentation

"As many of you know, we're making a big push into apparel (which is 4 times the size of the footwear market) as well as other product categories including bags, accessories, and housewares.

We think we're just at the tip of the iceberg of what's possible as we continue to build the Zappos brand to be about the very best customer service and the very best customer experience."

In the meantime, Zappos has converted its site completely to the new web design.

In Europe, fervid positioning wars are being fought by Zappos-wannabes: Sarenza (FR), Spartoo (FR) and Zalando (GE).

Originally posted in German by Jochen Krisch, adapted for excitingcommerce.com by Jason Soo.

Groupon Fever: CityDeal Gets Another 5 Million Euro

jkrisch — Thu, 18 Mar 2010 07:15:06 +0000

The next round in CityDeal poker: Not two months have passed for the Groupon clone since their first 4 million euro, and now they are getting a 5 million euro injection from the Samwer house:

"The new investment comes from an international group made up of the Swedish Investment AV Kinnevik, along with Germany’s Holtzbrinck Ventures and eVenture Capital Partners and, of course, the Samwers’ own incubator Rocket Internet."

It would be interesting to know if the existing investor group would endlessly pump in money or if fixed limits have been set by some of the individual financiers for when they would throw in the towel.

Groupon has announced their European start for this year.

Originally posted in German by Jochen Krisch, adapted for excitingcommerce.com by Jason Soo.

Groupon Fever: LivingSocial Nabs Another $25 Million

jkrisch — Mon, 15 Mar 2010 22:44:29 +0000

Not a long time ago, Groupon clone LivingSocial raised $5 million for itself. A few days ago, they put another $25 million on top:

"LivingSocial — which has more than a million daily email subscribers — is today announcing it’s raised a $25 million Series B round led by U.S. Venture Partners and including Grotech Ventures and Revolution Capital, bringing the company to a total of about $35 million raised.

That follows Groupon’s $30 million B round from Accel Partners and New Enterprise Associates announced in December."

Next in line in the US would be BuyWithMe again.

Originally posted in German by Jochen Krisch, adapted for excitingcommerce.com by Jason Soo.

Swoopo Loses Another CEO

jkrisch — Sat, 13 Mar 2010 17:18:08 +0000

After the departure of CEO Gunnar Piening last December, his successor Ralph Werner has also left Swoopo at the beginning of February (after only 8 months).

Frank Han from the US is now leading the company. Since the participation of August Capital in April of last year, there has been no end to the unrest at the company.

Swoopo, with its innovative business model, counts as one of the pioneers of “extreme retailing” and is the catalyst for the global Penny Auction Boom.

Most recently, Swoopo has had to tone down their business model and reimburse users their participation fees after buying a product.

Originally posted in German by Jochen Krisch, adapted for excitingcommerce.com by Jason Soo.

The Amazon WebStore and the Shopping System of the Future

jkrisch — Thu, 11 Mar 2010 22:55:57 +0000

This is a further post for our loose series on “Shopping Systems of the Future”.

While the next e-commerce generation has long been hoping for new and more sales oriented shopping systems, in the classical warehouse oriented e-commerce world, Amazon is still the ultimate role model for online trade.

It should be then good news now for online and catalog-based shops. Amazon is currently testing a new webstore which will offer many of the Amazon shop functionalities to smaller merchants:

"Shake hands with the leader in ecommerce innovation, and succeed in your ecommerce endeavors."

The current shop systems from Amazon and similar marketplaces are slowly but surely reaching the limits of their conceptional extendibility and have therefore (according to our estimates) a rather short half-life. There is also the valid hope that via Magento and similar efforts, a new generation of solutions will rise over the next years offering e-commerce companies the same potential which nowadays still require custom development efforts.

How will (or must) shopping solutions look like in the next 5 to 10 years?

A few related posts related to this question:

Originally posted in German by Jochen Krisch, adapted for excitingcommerce.com by Jason Soo.

Webtrends, Facebook, iphone: Social Media Marketing 2.0

mosofsky — Thu, 11 Mar 2010 20:50:04 +0000

2010 is the year in which most Marketers are shifting from social media and mobile dabblers to believers. The challenge Marketers face is that the enabling technology is still designed for dabbling. Nearly every Marketer is forced to create one-off Facebook apps, separate iPhone apps and separate websites with no common content management system, analytics, testing or targeting. This creates a significant challenge as Marketers move to scale their efforts up and measure results.

I recently had a briefing from Webtrends (full disclosure: Webtrends is a partner of ours) and believe their recent announcements show the path forward towards a new, online marketing platform that manages web, social and mobile. Webtrends Analytics 9 is the first to aggregate Facebook (via API) and iphone app (via SDK) analytics together with website data. This provides the first single view for Marketers to see activity across these key online channels. Consumer behavior crosses these channels fluidly and Marketers need the ability to track and measure what is actually going on rather than still focusing on their homepage.

Webtrends Analytics 9 is a great first step showing a consolidated view of analytics across key online channels. Webtrends Optimize holds the promise of enabling Marketers to use a common mechanism to embed and manage content/applications across distributed online channels (Facebook, smart phones, partner websites). No one has pulled this off yet as far as I am aware, but Webtrends Optimize is as close as any to get there. The most likely players are the Testing & Targeting bunch that have largely been acquired by larger players (Omniture, Autonomy, Webtrends, etc.) Currently, it appears to me that Webtrends is picking up the challenge most aggressively, have the fewest distractions and their bias towards openness in their platforms lends itself well to the challenge.

Here's hoping Webtrends completes the vision for the sake of all Marketers. Please share your thoughts if you see other companies heading this way. Who do you think will win?

Extreme Retailing: Change Is Coming to Online Shopping

jkrisch — Tue, 09 Mar 2010 22:31:32 +0000

Everything is suddenly possible again in the e-commerce world. In the US in particular, interest in extreme e-commerce models is rising steeply (“Are you ready for extreme retailing?”).

Joshua Goldman from Norwest Venture Partners gave a short introduction to Swooponomics at the Retail Innovation & Marketing Conference:

Parallel to that, several American innovators met at the First Round Capital E-commerce Summit.

The comments of the event organizer (“Change is coming to online shopping”) corroborates much of what Exciting Commerce has been heralding since 2005 which was also self-evident at this year's Live Shopping Days Conference:

"One of the things that’s surprised me the most over the last decade is how little transformative innovation has occurred in ecommerce.

eBay looks pretty much the same as it did a decade ago. Amazon looks pretty much the same as it did a decade ago. While the top 10 sites on the Internet have changed dramatically over the last decade, the top 10 online shopping sites on the Internet have not.

The traditional catalog/cart shopping model remains pretty much unchanged. I’m not sure of the reasons why so little innovation has occurred – perhaps it is because of Google.

Specifically, the fact that online retailers had a scalable, measurable, and predictable source of customer traffic (through both SEO and Adwords) might have reduced the external pressures to innovate.

However, the online shopping paradigm is finally changing. Indeed, I think we’ve seen more innovation in the last 10 months than in the last 10 years.

We’ve seen an explosion of interesting technologies and opportunities that seek to change online shopping"

The American innovators cover a wide range of methods and models from alternative payment systems down to game mechanics.

Originally posted in German by Jochen Krisch, adapted for excitingcommerce.com by Jason Soo.

Oliver Jung’s Global Shopping Club Empire

jkrisch — Mon, 08 Mar 2010 19:08:24 +0000

Brands4Friends Goes the World: It feels almost like there aren’t any more countries where B4F founding investor Oliver Jung and his cohorts haven’t got a shopping club investment stake.

A few days ago an announcement came by email which mentions for the first time publicly the “global shopping club alliance”:

"Australia’s leading by invitation only shopping club, brandsExclusive, announced it has raised substantial Series A funding from Trayas.

Trayas is led by Klaus Hommels and Oliver Jung, who are also invested in a number of leading overseas shopping clubs including Turkish Markafoni.com, the Brasilian Brandsclub.com.br, the Swiss Fashionfriends.ch and the Indian FashionandYou.com.

“The global shopping club alliance, which has a combined membership of several million online shoppers worldwide, creates an amazing opportunity for Australian brands to reach a wider international audience, and for the Australian consumer to access more brands and even greater deals.” Says co-founder Daniel Jarosch."

Besides the known 9% of Brands4Friends that Oliver Jung holds, he also has a stake in Russian KupiVIP (which recently raised $20 million in funding), as well as the Canadian Beyond The Rack, who announced their financing round at the end of January.

Originally posted in German by Jochen Krisch, adapted for excitingcommerce.com by Jason Soo.

Groupon Fever: How Groupon Wards Off Class Action Lawsuits

jkrisch — Mon, 08 Mar 2010 18:37:57 +0000

Overambitious lawyers are the bane of every serious startup company. At the moment, Groupon is finding it necessary to defend against a class action lawsuit in the USA - and is doing so with its customary tongue-in-cheek style (“Groupon Organizes Class Action Against Itself”):

"You may or may not have heard that a lawyer named Jay Edelson from a law firm called Edelson McGuire is attempting to organize a class action lawsuit against Groupon, claiming that our deals’ prominently displayed expiration dates somehow “systematically deceive our customers.”

We can think of two possible explanations for this lawsuit:

The law firm sees an opportunity to exploit our success and make a bunch of money.
We are indeed systematically deceiving our customers, but instead of taking advantage of our 100% open refund policy or telling us about their problems or sharing them in a public forum, our customers are secretly gossiping about them to each other and Edelson McGuire, kind of like Emily Johnson did against me in 9th grade (Emily if you are reading this I want my cabbage patch doll back)."

“Corporate Overlord” Andrew Mason reveals how Groupon would like to ward off self-inflicted lawsuits in the Groupon blog.

Originally posted in German by Jochen Krisch, adapted for excitingcommerce.com by Jason Soo.