ChannelAdvisor announced on Thursday it had raised $20 million in funding, one day after it laid off a large number of employees. CEO Scot Wingo said the company had reached a desired scale and would now focus on profitability. The company had been focused on revenue growth, experiencing a 55% year-over-year increase in revenue this year. He denied rumors that the company had looked to raise more than the $20 million it received, which brings the total raised to $80 million.
Wingo said eBay's participation in the round was a vote of confidence, but said accusations he was in eBay's pocket were untrue. He said he does not endorse all of eBay's changes and still thinks auctions are a good format. He had been quoted in BusinessWeek last month applauding eBay's recent focus on fixed-price over auction formats.
The CEO said the chaos eBay sellers are experiencing with all of eBay's changes and their urge to diversify are dramatically increasing customer acquisition for the company. Sellers using eBay's Turbo Lister tool are spending 80 - 90 percent of their time updating templates to keep up with the changes, where his software helps customers stay in front of the "total chaos out there." As for customer retention rates, he said ChannelAdvisor's customer churn is lower than benchmark companies such as Salesforce.com and ConstantContact.
ChannelAdvisor is laying off 20 percent of its 350 employees, with layoffs across all departments and locations. Affected employees are receiving severance packages and outplacement services, according to Wingo. The company is consolidating its sales staff into a global team rather than segregated by country. Such streamlining has eliminated the need for some of the vice president-level staff terminated last month, he said.
ChannelAdvisor executives will take on expanded roles as part of the restructuring. David Spitz, Vice President of Operations, is responsible for global products, services, and finance operations. Michael Jones, Vice President of Business Development, Marketing and Strategic Partnerships, currently leads ChannelAdvisor's global marketing, business development, corporate development and acquisition strategies. Jones will be expanding his role to include global sales and revenue responsibilities. And Scott Alridge, Vice President and General Counsel, will be expanding his role to include human resources operations.
Rivals say ChannelAdvisor clients make up a significant portion of eBay's Gross Merchandise Volume, particularly in the US, an incentive for eBay's investment. No other marketplace participated in the funding round, which was led by New Enterprise Associates (NEA) with participation from current ChannelAdvisor investors Advanced Technology Ventures, Kodiak Venture Partners, eBay and Southern Capitol Ventures.
The company now boasts of more than 100 top Internet retailers from the prestigious Internet Retailer magazine's Top 500 list. With several acquisitions over the past two years, ChannelAdvisor has expanded its paid search offerings, distanced its leadership in the online marketplace space and most recently entered into the rich media segment with the acquisition of RichFX.
http://www.channeladvisor.com
