Magento To Fuel Expansion with $22.5 Million Growth Capital
Mar 29th, 2010 by admin
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.
Picture of Magento To Fuel Expansion with $22.5 Million Growth Capital [source:excitingcommerce.com]
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.
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.
Magento Matters: The Rapid Rise of a Shopping System Magento Strategies: Seeking Crowdsourcing Extensions Magento Matters: Vertical Versions Coming in Spring
Originally posted in German by Jochen Krisch, adapted for excitingcommerce.com by Jason Soo.[source:excitingcommerce.com]
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