Austin’s Bigcommerce Taps Steve Case’s Fund to Take On Amazon
[Corrected 06/30/14, 8:22pm] Bigcommerce, an e-retail software maker in Austin, TX, has gotten a $40-million boost from one of tech’s biggest names.
In the year since Steve Case’s Revolution Growth Fund made the investment, bringing the company’s total funds raised to $75 million, BigCommerce has aggressively expanded both its workforce and its target customer. [The funding was announced last year.] The Austin company is seeking to offer its software and platforms to a larger number of e-retail businesses, says Steven Power, Bigcommerce’s president.
“There’s just a massive growth opportunity as the world continues to move online,” he says.
Since its founding in 2009, Bigcommerce’s customers were largely new merchants, just starting out both in real life and online. “They were on Etsy and eBay and Pinterest,” Power says. Now, Bigcommerce is setting its sights on larger businesses, ones that are looking to upgrade their e-retail infrastructure and expand their business.
“We are more recently working with more mid-sized customers,” he says. “Not Target or Neiman-Marcus, but people who are doing $500,000 to $5 million to $10 million of revenue.”
Such an expansion of the company’s client base necessitates 24/7 service, he adds. “We need to be able to support all of our clients around the world, wherever they may be, when they need service,” he says.
Bigcommerce was founded in Sydney by two Australians, Eddie Machaalani and Mitchell Harper, who met in an Internet chat room 10 years ago, Power says. The company decided it needed a beachhead in North America—one of its most important markets—and opened its Austin office four years ago. Today, Bigcommerce employs about 300 people and has more than 50,000 customers in 65 countries. Power says about $4 billion worth of transactions go through Bigcommerce-enabled sites.
The company has made some changes to its executive suite to help guide it through the next phase. For one, Steve Case, who founded Internet service and content provider AOL in 1985, has joined Bigcommerce’s board following his fund’s investment. Power himself has just become president, the company’s first. He had been chief revenue officer. (Bigcommerce’s founders, Machaalani and Harper, had previously split the CEO duties. Machaalani now takes over full-time as CEO while Harper remains at the company in a more strategic role, Power says.)
Competitors in online retailing include Shopify, based in Ottawa, Canada, which recently announced a push to launch 10,000 e-commerce sites in India in 2015, and Volusion—also based in Austin—which also recently announced a $35 million debt financing with Silicon Valley Bank to fund an expansion of its product portfolio.
Not too surprisingly, Power says Bigcommerce is now positioning itself against the mother of all e-commerce platforms: Amazon. “I have a great deal of respect for them,” he says. “What they’ve done is helpful for a merchant in many ways.”
“But they can also be a great ‘frenemy,’” he cautioned. “If a merchant gets too successful, Amazon will set themselves up in competition to the merchant.”