By Lori Hawkins
Austin American-Statesman.
When Jeff and Tabatha Conarko decided to create an online store to complement their artisanal olive oil and vinegar shop in the Arboretum, they built the site themselves.
For the next three years, they struggled to manage Con’ Olio Oils & Vinegars’ website, dealing with software that was clunky and difficult to update.
“A year ago, it became clear that our cobbled together approach wasn’t working and it was time to make a change,” said Jeff Conarko. “But when we interviewed web page developers, we received estimates that a small business couldn’t possible afford. Then we heard about Bigcommerce.”
Bigcommerce, which has headquarters in Austin and Australia, sells software that lets retailers create Web storefronts, handle transactions and track inventory and shipping.
“It’s made a huge difference,” Conarko said. “Now we can add easily add new product information and target promotions to customers, and people are able to check-out without issues. It’s really sparked our online sales, which are up 20 percent since we’ve moved to Bigcommerce.”
Winning over small merchants like Con’ Olio, and partnering with big players like eBay to provide software for thousands of its merchants, has put Bigcommerce on the fast track.
Over the past 18 months the company has signed on 20,000 new clients, bringing the number of sites running on Bigcommerce to 60,000. Users include Gibson Guitar, Pandora Jewelers and Willie Nelson’s General Store, as well as dozens of one-person home-based businesses using the software to make their first sale.
“We level the commerce playing field by letting the smallest merchant effectively compete with the largest players in their industry,” said Eddie Machaalani, co-founder and CEO of Bigcommerce. “It shouldn’t take a degree in Web development to run a successful online store.”
The influx of new customers is reflected in the company’s growing sales: Bigcommerce posted revenue of $23.5 million in 2013, up 204 percent from $7.7 million in 2010, according to this year’s Inc. 5000 list of fastest growing companies. (Bigcommerce was No. 1997.)
Now, a new $50 million investment, on top of $100 million the company previously raised, promises to further fuel Bigcommerce’s expansion.
The latest cash infusion from backers including American Express, SoftBank Capital and Revolution Growth, the venture firm led by America Online co-founder Steve Case, will allow it to speed up product development, invest in sales and marketing and make an international push.
And even though it might seem like most small businesses already sell their products online, Bigcommerce still sees a huge opportunity with U.S. retailers.
“You’d be surprised by how many don’t have a Web storefront,” Robert Alvarez, Bigcommerce’s chief financial officer said. “Of the 20 million small businesses, only 28 percentcan transact online.”
That’s one reason why online storefronts still make up just 9 percent, or $294 billion, of all U.S. sales, according to Forrester Research. By 2018, e-commerce will make up more than 11 percent of sales, worth $414 billion, the market research firm said.
Bigcommerce’s roots go back to 2009, when it was founded in Sydney, Australia by entrepreneurs Machaalani and Mitchell Harper.
Today, the 350-person company handles most of its software development in Sydney. It opened its North American headquarters in Austin five years ago, drawn by the region’s technical talent pool and cost of living.
The company now has 260 employees in Austin, where it handles business operations including sales, marketing and support. Alvarez said the company wants to add another 100 people in Austin over the next 18 months.
The challenge for Bigcommerce will be standing out in a crowded field that includes giants including Amazon and dozens of smaller players including Shopify, which runs more than 125,000 shops on its platform and Austin-based Volusion, which operates more than 40,000 online stores.
Alvarez said Bigcommerce sets itself apart with its easy-to-use software, customers can typically get set up and ready for their first sale in thirty minutes, and its pricing. Based on transactions, clients pay a month fee from $30 to $5,000 a month.
While some industry analysts are predicting a consolidation of e-commerce software providers, Alvarez said Bigcommerce plans to remain independent, and is aiming for an initial public offering in the next 12 to 18 months.
“Our goal is to be a stand alone,” he said. “Every employee has equity in the company, and we feel like we’ll be a great candidate to go out and go public.”
