* Shares jump more than 40 percent
* Investors bet company will benefit from global e-commerce
* ChannelAdvisor 'interested' in Alibaba marketplaces -CEO
By Alistair Barr and Tanya Agrawal
May 23 ChannelAdvisor Corp shares
soared more than 40 percent in their market debut on Thursday as
investors bet the e-commerce software company will benefit from
the rapid global spread of online buying and selling.
The company's shares opened up 25 percent, after its initial
public offering of 5.8 million shares was priced at $14 per
share, the high end of its pricing range.
ChannelAdvisor shares were trading up 40 percent at $19.54
on the New York Stock Exchange. They touched an intraday high of
$19.73, valuing the company at about $400 million.
Other IPOs on Thursday did not perform as well. Global Brass
and Copper and Ply Gem Holdings rose less than
20 percent and Constellium declined 5.5 percent.
ChannelAdvisor, founded in 2001, helps companies sell via
online marketplaces and websites such as Amazon.com Inc
, Google Inc and eBay Inc. Customers
include Ann Taylor, eBags.com, J&R Electronics and Jos. A. Bank
E-commerce is growing at about 15 percent a year and
Forrester Research estimates that global online consumer
spending will top $1 trillion by 2016.
ChannelAdvisor gets fees when its customers generate an
agreed-upon volume of sales using its software. When sales
exceed those levels, customers pay a little more in what the
company calls a "shared-success model."
"We have about 2,000 customers and handled over $3.5 billion
in gross merchandise volume last year," said Scot Wingo, chief
executive of ChannelAdvisor. "That's really the tip of the
iceberg. We have a lot of wood to chop, as these bankers like to
ChannelAdvisor generated a net loss of $4.9 million last
year, compared with a loss of $3.9 million in 2011 and $4.7
million in 2010. Revenue rose to $54 million in 2012, up from
$44 million in 2011 and $37 million in 2010, according to the
company's SEC filings.
GLOBAL GROWTH PLANNED
The IPO raised more than $80 million and the Morrisville,
North Carolina-based company, whose competitors include Mercent
Corp, plans to use the proceeds to expand outside North America
and build its sales and marketing capabilities.
North America accounts for most online consumer spending
currently, however Forrester expects the region to account for
about a third of the global total in the future as other
countries grow faster.
"We would love to be a truly global company and be a
reflection of the truly global nature of e-commerce," Wingo
ChannelAdvisor does not help companies sell through online
marketplaces run by Alibaba, the Chinese e-commerce leader.
However, Wingo said that may change.
"So far, we've done everything not to sell our software into
China," Wingo said. "But it's interesting to us. Alibaba is
bigger than eBay and Amazon combined."
Investment firms Kodiak Venture Partners, Advance Technology
Ventures and New Enterprise Associates own 47.5 percent of
ChannelAdvisor after the offering.
Last week, data analysis software maker Tableau Software Inc
saw its shares jump as much as 68 percent in its
trading debut on rising interest in big data.
Shares of business software companies such as WorkDay Inc
, Guidewire Software Inc and ServiceNow Inc
are also trading well above their IPO prices.
Enterprise companies, which sell software and services to
businesses rather than individuals, have risen 37 percent, on
average, in the two years since their IPOs, compared with 13
percent for consumer companies, according to market data firm
The companies are being buoyed by new technologies like
mobile and cloud computing, trends that are creating tremendous
business opportunities for young enterprise firms, investors
say, leading them to grab market share from incumbents like
Oracle Corp and SAP AG.
One of the biggest reasons for the enthusiasm involves cloud
services, which run on off-site, rented computer servers rather
than owned hardware on-premise - and the ensuing savings and
Goldman Sachs and Stifel Nicolaus are the lead underwriters
on the offering.