After Missing Key Milestones, N2N Calls it the End; E-Commerce Startup Had Raised $30 Million

1/3/08Follow @bbuderi

N2N Commerce, a Cambridge, MA-based e-commerce company that raised $30 million from General Catalyst Partners and Limited Brands (from which it spun off), laid off essentially all its staff just before Christmas and is ceasing operations, says a source close to the company, confirming a report yesterday in TechCrunch. The source also says the 18-month-old startup had missed a series of milestones in delivering its technology to key customer Victoria’s Secret, prompting the lingerie firm to withdraw its business and essentially sealing N2N’s fate.

N2N’s goal of developing a cross-channel commerce platform—allowing large retailers to integrate and manage content and sales across the Internet, catalogs, and physical stores—was ambitious. Our source believes N2N’s technology was promising, and “not an unqualified failure.” However, the source adds, “they definitely missed some important milestones.” Also evidently contributing to N2N’s problems was internal politics at Limited Brands, the corporate parent of Victoria’s Secret. The source did not elaborate on that point.

N2N launched in June 2006. Last February, it announced a $30 million Series A funding round that marked New England’s largest venture deal in the first half of 2007.

A call to N2N CEO and president Ruben Pinchanski and an e-mail to the firm’s press contact went unreturned, as did an e-mail to General Catalyst.

Kudos to TechCrunch’s Erick Schonfeld for breaking this story. Schonfeld also had a key insight: “In retrospect, the warning signs were everywhere: 1) big company spin-off; 2) raised way too much money for a series A round; 3) reliance on that same big company as its main customer (and as an investor).”

Bob is Xconomy's founder and editor in chief. You can e-mail him at bbuderi@xconomy.com, call him at 617.500.5926. Follow @bbuderi

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  • Chris Finn

    n2N Commerce Completes Estimate for the Number of Development Hours Required to Complete Its E-Commerce Platform
    WELLESLEY HILLS, Mass.–(BUSINESS WIRE)–Joseph F. Finn, Jr., C.P.A., the Assignee for the Benefit of Creditors of n2N Commerce, Incorporated (n2N), today announced that he has secured two separate estimates (in person hours) for the software development work required to complete the n2N e-commerce platform. n2N was a company formed to develop the retail industry’s first cross-channel, on-demand e-commerce software solution specifically designed for larger multi-channel retailers.

    The first estimate was developed by the n2N Commerce internal development team that assessed the applications in their current state and created a detailed estimate for the necessary software development required to complete all ten (10) applications that make up the n2N platform. That estimate was confirmed by a third party offshore software development company, Trigent Software.

    Prospective buyers who have signed, or will sign, the NDA will receive this detailed information as part of the bid package.

    The sale of n2N’s assets, consisting of ten (10) software packages, is being conducted through an Assignment for the Benefit of Creditors. The bidding for the assets, which may be purchased separately or in combination, is scheduled for April 11, 2008. Any person interested in purchasing the assets or learning more about the bidding process should contact Mr. Joseph F. Finn, Jr., C.P.A. at (jffinnjr@earthlink.net, phone 781-237-8840), Finn, Warnke & Gayton, 167 Worcester Street, Suite 201, Wellesley Hills, MA 02481-3613.

    About n2N Commerce

    Founded in 2006, n2N Commerce was a venture between Limited Brands, Inc. and General Catalyst Partners. The company leveraged the extensive market knowledge and detailed requirements of a $10B retailer combined with more than $45M in capital to design and develop the industry’s first cross-channel, on-demand e-commerce software solution specifically designed for larger multichannel retailers. n2N recently assigned its assets to Joseph F. Finn Jr., C.P.A. and is currently in the process of selling its proprietary software packages through an Assignment for the Benefit of Creditors.

  • Chris Finn

    n2N Commerce Auction Extended to May 2, 2008
    WELLESLEY HILLS, Mass.–(BUSINESS WIRE)–Joseph F. Finn, Jr., C.P.A., the Assignee for the Benefit of Creditors of n2N Commerce, Incorporated (n2N), today announced that he has extended the date of the auction for n2N Commerce’s technology to May 2, 2008, due to the additional time needed by several large software companies currently conducting due diligence. n2N was a company formed to develop the retail industry’s first cross-channel, on-demand e-commerce software solution specifically designed for larger multi-channel retailers.

    To complement the ISV’s due diligence, n2N recently secured two separate estimates (in person hours) for the software development work required to complete the n2N e-commerce platform. Prospective buyers who have signed, or will sign, the NDA will receive this detailed information as part of the bid package.

    The sale of n2N’s assets, consisting of ten (10) software packages, is being conducted through an Assignment for the Benefit of Creditors. The bidding for the assets, which may be purchased separately or in combination, is now scheduled for May 2, 2008. Any person interested in purchasing the assets or learning more about the bidding process should contact Mr. Joseph F. Finn, Jr., C.P.A. at (jffinnjr@earthlink.net, phone 781-237-8840), Finn, Warnke & Gayton, 167 Worcester Street, Suite 201, Wellesley Hills, MA 02481-3613.

    About n2N Commerce

    Founded in 2006, n2N Commerce was a venture between Limited Brands, Inc. and General Catalyst Partners. The company leveraged the extensive market knowledge and detailed requirements of a $10B retailer combined with more than $45M in capital to design and develop the industry’s first cross-channel, on-demand e-commerce software solution specifically designed for larger multichannel retailers. n2N recently assigned its assets to Joseph F. Finn Jr., C.P.A. and is currently in the process of selling its proprietary software packages through an Assignment for the Benefit of Creditors.