Bonanzle Raises $1M from Angel Investors, Plus Three VC Firms, to Expand Its Online Marketplace

4/29/10Follow @gthuang

The motto of Bonanzle is “everything but the ordinary.” That about sums up the latest news from this Seattle-area startup, which has built a fast-growing online marketplace for niche items and collectibles. I learned through the grapevine that Bonanzle founder Bill Harding has closed a $1 million funding round led by angel investor and venture capitalist Geoff Entress, with participation from a long list of well-known angels around town—plus three prominent venture firms.

It’s a small deal, a classic angel investment, but it’s particularly interesting for this reason: Seattle-area venture firms Voyager Capital (led by Entress) and Ignition Partners (Michelle Goldberg), plus Bay Area firm Matrix Partners (Josh Hannah), have all invested in the deal. All together, the venture firms put in less than half of the total funding amount—but presumably they will be watching to see if this is something they want to put more money behind.

“I have not seen it before. It’s something unusual,” says Entress, who has joined Bonanzle’s board. “Probably an example of the experimentation” that VCs are doing around “how do you play at this earliest stage, especially when a lot of these companies don’t take much money.” (Venture firms usually need to put in a few million dollars to make it worth their time.)

And here’s a partial who’s-who list of angels participating in the deal: Dan Shapiro, formerly of Ontela and Photobucket, Andy Liu from BuddyTV, Kelly Smith from Inkd and Curious Office, Kevin Saliba from Imagekind and CafePress, Ben Elowitz from Blue Nile and Wetpaint, and Chris DeVore of Founder’s Co-op. Let’s just say that’s a lot of investor firepower for a $1 million deal; the closest thing we’ve seen might be when all the tech investors in town agreed to back TechStars, which opens in Seattle this fall.

I first wrote about Bonanzle on April Fools’ Day, 2009. But this company is no joke. Founded in 2007, it started out as a Craigslist-like service for local sellers, but shifted to become a national, social online marketplace. Bonanzle rolled out its public site in September 2008 to connect buyers and sellers of collectible items like comic books, posters, and jewelry. Its key advantages over others in the sector are its social features—buyers and sellers can send messages to each other in real-time—and the fact that it focuses on rare, used, and hard-to-find items. The company has been profitable since February 2009, and its sales have quadrupled in the past year. Its site now has more than 3 million items for sale, a quarter-million registered users, and almost 2 million unique monthly visitors. All without taking any outside investment.

So why take the money now? A year ago, Harding told me the company was “waiting for [an investor] to make an offer that shows us they understand the vision of Bonanzle and will work with us to make a plan.” Well, it sounds like he has found the right group of investors and expertise. For example, Matrix Partners has deep experience with companies like eBay and PayPal. And the track record of the Seattle-area investors speaks for itself.

Harding says the new money will allow him to hire two more developers, a designer, and a product manager, to add to the current team of three full-timers and a handful of contractors. “It’ll still be a small company,” he says. The key is to “provide users with a really strong … Next Page »

Gregory T. Huang is Xconomy's Deputy Editor, National IT Editor, and the Editor of Xconomy Boston. You can e-mail him at gthuang@xconomy.com or call him at 617-252-7323. Follow @gthuang

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  • Digby

    Well I hope those guys with ebay and payapl experience wont impose their ideas on Bill.

  • http://www.renagadesmusic.com Renagade

    Thank you Mr. Huang for an excellent article on this new and exciting development for Bonanzle.
    With the growth of Bonanzle, it is not surprizing that it attracted the investors, they know Bonanzle is a solid investment.
    Bill Harding and his small team have build something unique and fresh. And with the growth of Bonanzle it is not surprizing that Harding would seek out investors to help him continue along the path he set his dream on.
    Bonanzle is unique. This is what makes it such an attractive place for many in the eCommerce world and what has fueled its growth.
    One can only hope these investors completely grasp this and think out of the box when developing ideas to further Bonanzle’s footing in the world of online sales.
    Or better yet, I recommend they follow Bills lead and throw that box of ideas out.

  • http://www.ezbizwebsite.com JSGeare

    While it is difficult to take a “long view” of a company with such a brief history, the mileposts of success are clearly evident. The growth and early profitability; the continued focus on the core agenda and the people who are served. For the investors, it must be very refreshing to see the proved, operating concept at work as opposed to piles of studies and surveys which describe something that does not exist at all. Geoff Entress speaks of putting “. . .more gas on the fire . . .”. Exactly my point: at Bonanzle, there IS an actual fire to feed.

    Some of the fuel for a sustainable controlled burn, however, might well be found within the community of buyers and sellers. I hope Bill and his investors consider the idea of a partnership investment format for Bonanzle members and other “little guys” as well. Indeed, the success thus far has been the result of many small entrepreneurs, all pulling together. Why not offer to them some share of the opportunity and risk in growing the enterprise as a whole?

    Regardless of the outcome of the infusion of dollars, it is inspiring to see that Bill got it “the old fashioned way.” He EARNED it.

  • http://www.bonanzle.com/booths/Dianne_Ulery Dianne Ulery

    I’ve had 2 booths on Bonanzle for over a year now. LOVE the place, the people, the help, the ease of listing. Love the entire Bonanzle Experience. Drop in for a friendly visit soon. Dianne Ulery

  • STBThreadworks

    One of the great aspects of Bonanzle is that it has made it very affordable and simple for people like me to fulfill their dreams of starting up a small business. While it has been necessary to await the “growth factor” to bring buyers to the site, we have lived in a wonderfully friendly and warm environment.

    Our items have surfaced high in Google search. Even though we are not yet a “popular” site for items like the ones I create and sell, our Bonanzle sales have rivaled the other sites out there.

    The one critical thing (to me) that Bonanzle has offered me is the chance to do what I love doing. Every day I can wake up and know that I can work with my hands to create beautiful things and stand a chance to sell them. And THAT is priceless. The only thing that really bugs me is that Bill gets me every April 1st with some of the most creative “got ya’s”. He really is an (good) evil genius!

  • Alilbirdy2

    after testing the waters in other venues, some looked more promising than Bonanzle did in the begining, they fizzled out. When I came here it was with an open mind and looking objectively at the way it was set up. I thought well this place has promise, but the main thing that stood out was the Uncanned response members received from support.

    That alone, made this place stand above all the rest of the new start ups, as well as those that have been around for years, it is even better than the one online auction site that is larger than all of them put together.

    When you lose that down home feel, you start feeling like a large corperation, and the little man becomes lost in the shuffle. Bonanzle has not lost that down home feel, and I hope it never will.

    Great Support is the backbone of any company, it keeps folks coming back because they know they will be speaking with a real human being which also makes them feel like they are important.

    My money is on Bonanzle growing into the largest online venue in a few short years. Hold on folks we are just now at the starting gate and the whistle has sounded and the race is on. We are riding a winner !

  • http://www.addoway.com Fredrick Nijm

    Congrats Bill! It’s a pleasure to have Addoway mentioned alongside Bonanzle. Keep up the great work!

  • http://www.bidmodo.com Lyn Graft

    Speaks to the value of companies that are serving niche markets such as Bonanzle or companies that are leveraging communities such as Addoway to organically grow and get passionate customers at the same time. Good lessons for us at BidModo.com as we work through our beta phase serving small business owners and entrepreneurs.

  • Bruce (Solomon Valley Books & Sunflower Boutique)

    I sell on a lot of different venues and all have their good points and bad points! I have found only one venue that I really do not care to sell on and that is the one that wants fees upfront before the sale. I love the simplicity of both Addoway and Bonanzle and will continue to sell on both along with other venues. Keep up the good work Fredrick and Bill and congrats on the funding! Bruce

  • Craig

    “Some of the fuel for a sustainable controlled burn, however, might well be found within the community of buyers and sellers. I hope Bill and his investors consider the idea of a partnership investment format for Bonanzle members and other “little guys” as well. Indeed, the success thus far has been the result of many small entrepreneurs, all pulling together. Why not offer to them some share of the opportunity and risk in growing the enterprise as a whole?”

    I heartily agree. As a relatively early adopter of the online auction/ecommerce experience I was dismayed when those small sellers, myself included, who had made *bay what it had grown into prior to the IPO were totally left out when the site went public. 80% of the publically offered stock had already been set aside for the ‘vampire squid’ Google on the other hand, allowed the public and early adopters the opportunity to get in on the ground floor, as it were, and those that did so did very well.

    I would like to think that Bonanzle would adopt the Google model should they reach the IPO stage in their development.

  • http://www.bonanzle.com/yeshuazgirl Yeshuazgirl

    Bonanzle is a smart investment for online sellers looking for a wonderful and supportive community as well as an easy to use and navigate platform to build their own brand. Bonanzle provides all of the tools necessary to succeed. You just need to take hold of them and do a little work on your own and you are certain to sell successfully. not only does Bonanzle have a wonderful community willing to selflessly share their ideas and experience and expertise, but, the Owner and Top Magement often personally respon to your e-mails within a VERY short period of time!

    Bonanzle is the by far THE best online buying and selling venue today.

    Thank you for your well written and insightful article!

    All The Best!

    ~Patti (Yeshuazgirl)

  • qwerty

    I am a return shopper at the Bonz and the non pressure atmosphere is wondeful at ebay people are begging for feed back and telling me what kind of feed back to leave them it is nuts I dont put up with that in a B&M store and I ddnt take it from ebay ….I havent missed anything not returning there…if you ask this shopper BONANZLE is the next shopping experience online congrats Bonanzle

  • http://www.bonanzle.com/momspennies Momspennies

    This certainly is very exciting news! Bonanzle has benefited only from grassroots efforts of it’s early members who were joined by newer members as the excitement continued to spread through the community. Those of us who live and work everyday on this venue share a passion for success, and Bill and his team have worked very hard to provide a format where we can do just that. And it’s only getting better with time.

    We already knew that Bonanzle was a company worthy of extensive growth and development and it is so nice to see that others are sitting up and taking notice, as well as providing financial backing to help Bonanzle to continue to build on an idea that makes us different from everyone else out there.

    Knowing the members like I do, I am sure that they will continue their efforts and not sit on their hands because of this new development. There is still so much more to do. The commitment is evident every where you look!

  • http://www.bonanzle.com/booths/eyecatchingbeauty Mechelle

    Bonanzle is a worthy investment – in fact it is a wise investment as is demonstrated by those who have put their dollar into the hat.

    One only need to read Bill Harding’s Blog chronicling the development of Bonanzle to know Bonanzle will be nothing but a monumental success paving the road of a new e-commerce experience. Bonanzle’s short history has been one of unprecedented growth and success in the e-commerce marketplace market – not because of the similarity with eBay, which is nothing more than they are both a venue for trade – it is because Bonanzle is a disruptive innovation in both its concept and its evolution. Bonanzle is creating an online shopping experience with a focus on fostering the relationship of people with similar interests both in products and just in general everyday life experiences.

    Visit our forums and you’ll find a family with all of the emotions typical of families – excitement, frustration, supportive, caring, annoyed, silly ….. it’s all there – drama too lol Meet and chat with friends in Booths or with Quick text, make a hand-picked list and it might be the face of Bonanzle for a few days, have questions visit the round table and you just might learn your answer….

  • http://www.bonanzle.com/yeshuazgirl Yeshuazgirl

    Bonanzle is open, friendly, helpful and built by the community and a few GREAT guys and gals who manage day to day operations. Often times sellers help each other and of course their individual buyers. Other times questions either posted in the forums or sent via e-mail to support are answered by Bonanzle’s Top Management directly!
    Bonanzle is quickly becoming a known and trusted name as well as a breath of fresh air to sellers and buyers alike!
    Thanks so this well written and insightful article! Stop by Bonanzle soon! :)

  • Kathy

    I agree with qwerty’s comment.
    I’m a regular shopper on Bonanzle. I’ve probably purchased over 100 items from about 70 different sellers and never did a seller on Bonanzle beg me for Feedback!
    I do leave though just to let them know my goodies arrived.

    It’s such a different atmosphere on Bonanzle.
    Everyone is extremely friendly and helpful and the sheer variety of items listed is really impressive.

  • http://www.coinbrag.com World Coins

    I’ve been selling on Bonanzle for a little over a year.

    As an eBay PowerSeller, Bonanzle made it very easy for me to get started by importing my eBay items onto their site. Without this feature, I would probably not have committed much to the website.

    Thanks to that feature though, I now have dedicated items for sale on Bonanzle that aren’t even available on eBay!

  • http://Bonanzle Helen

    Bonanzle is a great place to sell and shop! I won’t be surprised if it beats other major selling venues on the web. It also has an at home friendly atmosphere. There is tons of support from Bill and lots of friendly sellers to chat with in the forums.

  • http://www.di500.com David Jones

    We wish you the best.

    D&E:O)

  • Whittaker3

    We’ve been selling on Bonanzle for over a year, online for ten years. Bonanzle is the most affordable, successful, friendly venue.

    Congratulations on the funding. We’ll watch for many new developments.

    We’re looking forward to BonanzleUp in Kansas City in August….it will be very exciting to be a part of all the action!

  • http://www.globalholographics.com Dom Sorensen

    Not sure how they did it (probably the genius designers) but it works.
    Its a great website. Our main sales come from ebay, which is great but more like the Soviet Union of online marketplaces. They dictate and control everything, even how and when I get paid.
    Bonanzle, on the other hand, is friendly, affordable and innovative. And yes, we actually sell products through this website.

    It is by far the easiest place for us to sell on as they allow us to simply take our listings from ebay en masse and put them on the bonanzle site in a few clicks of the mouse.

    Is this the site of the future? Finally a legitimate competitor to the ebay empire? Yes and Yes. And now, I haven’t been paid to post this. I encourage you to visit, however.

  • Pingback: Bonanzle rebrands as Bonanza, acquires 1000 Markets | Curious Office

  • Felix

    Just wonder if anybody having trouble getting shipping orders, I place my order on 5-04-12 and my order still pending. I send email to Bonanzle and asking for information on my order and haven’t receive any replay and my question is this Company is trusty.

    • http://www.facebook.com/mark.dorsey Mark Dorsey

      Sorry to hear of the trouble Felix. If you were to contact support@bonanza.com then we can assist with your transaction.