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2016 IPO Prospects: BigCommerce Prepares to List

Posted on Thursday, Jun 2nd 2016

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According to market research firm eMarketer, global e-commerce sales will be worth $3.5 trillion by the year 2019. By 2019, e-commerce is estimated to account for 12.4% of total retail sales compared with 7.3% share in 2014. Australian company BigCommerce is helping turn this growth forecast into reality.

BigCommerce’s Offerings

BigCommerce was founded in 2003 as Web business Interspire Pty Ltd. by Australian developers Eddie Machaalani and Mitchell Harper. Prior to setting up Web business Interspire, Eddie was working as a freelancer building websites for different clients and Mitchell was running a programming website devArticles.com and working at a computer hardware company. The two met in an online chat room where they were trying to find a solution for a development problem. During the chat session, they realized that they both were in Sydney, Australia. The two met up soon and started to build things together.

At the onset, the two did not really have an idea of what they wanted to build together. Given their experience with content management applications, they started building a browser-based simple editing tool that anyone could use to edit their website. Soon they expanded into other Internet-based products. By 2007, the two began to offer an off-the-shelf online shopping cart called Interspire Shopping Cart. Based on market feedback, they then decided to build a hosted infrastructure product to launch a hosted version of the shopping cart. The product was liked by the market, and in 2009 the company pivoted into becoming an e-commerce platform called BigCommerce. For more on their entrepreneurial journey, read my interview with Mitchell Harper.

BigCommerce was initially helping small and medium enterprises from Sydney establish their e-commerce services. But it has never looked back since. It grew out of Australia to establishing offices in Austin and San Francisco. Today the company caters to more than 80,000 businesses globally. While other etailers like Amazon and eBay also offer SMEs with an opportunity to sell their merchandise online through their own marketplace, a consumer rarely remembers the name of the seller and instead associates the purchase as being made through Amazon or eBay. BigCommerce, on the other hand, makes it easier for the stores to create their own storefronts. Its customer list includes Camelbak, Native Union, and Martha Stewart, to name a few.

BigCommerce provides businesses with access to services that include designing and setting up of a storefront, secure cloud hosting, built-in marketing, and search engine optimization (SEO) features to drive traffic. Customers also benefit from features that help convert this traffic to sales and are able to accept payments, ship, and fulfill orders.

BigCommerce’s Financials

BigCommerce offers its services to customers for a fee based on the size of the business. For businesses generating sales of up to $50,000 a year, BigCommerce charges $29.95 a month. Larger businesses generating sales of $125,000 a year are charged $79.95 a month. BigCommerce also has an enterprise offering that begins at $199.95 a month for organizations with sales of up to $1 million a year. BigCommerce does not reveal its financial performance. Recent reports reveal that the company expects $100 million in revenues in 2017 and profitability on an EBITDA basis.

BigCommerce was bootstrapped initially. In 2011 it began raising funds from investors and has raised $166.2 million since from investors including American Express, FLOODGATE, General Catalyst Partners, GGV Capital, Revolution LLC, SoftBank Capital, and Telstra Ventures. Its last round of funding was held earlier this month when it raised $41 million from GGV at an undisclosed valuation. An earlier round held in November 2014 had valued BigCommerce at $500 million.

In June 2015, BigCommerce added PayPal’s alumnus Brent Bellm as its CEO. The move was geared to help BigCommerce go public this year. BigCommerce hasn’t commented on its plans yet, but it plans to target bigger customers before it finally lists this year on the US stock exchange.

Photo credit:  Nick Page/Flickr.com.

This segment is a part in the series : 2016 IPO Prospects


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