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