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EcommerceBytes-NewsFlash, Number 2588 - July 18, 2011 - ISSN 1539-5065    4 of 5

Ecommerce Platform Demandware Files for Initial Public Offering

By Ina Steiner
EcommerceBytes.com
July 18, 2011




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Demandware filed a registration statement with the Securities and Exchange Commission for a proposed Initial Public Offering of shares of its common stock. The company offers an ecommerce platform enabling enterprise-level retailers to manage customized ecommerce sites, including websites, mobile applications and other digital storefronts.

Demandware's entry-level pricing model starts at $60,000 annually. Its 75 clients include Bare Escentuals, Barneys New York, Brooks Sports, Columbia Sportswear, Crocs, Hanover Direct, Jones Apparel Group, Lifetime Brands, Jewelry Television, Neckermann, Panasonic, Reitmans and Theory. The company is also targeting new markets, including small- and medium-sized businesses, and expects to build sales and service operations in the Asia Pacific region.

Demandware was founded in 2004 and has 172 employees. It generated revenue of $7.5 million, $21.4 million and $36.7 million in 2008, 2009 and 2010, respectively, but experienced net losses in each year since its inception, except for 2010. It saw first quarter 2011 revenue of $11.6 million, an increase of 60% from the same quarter in 2010.

The number of customers using the Demandware Commerce platform increased from 16 in 2008 to 75 in the first quarter of 2011, a 67.4% compound annual growth rate (CAGR), and the number of ecommerce sites those customers operate on its platform increased from 39 to 237, an 82.5% CAGR.

When its competitor GSI announced 4 months ago that eBay was acquiring it, Demandware wrote on its blog that it was "thrilled" by the recent developments in the industry. "We at Demandware are excited to see that in the past six months, two public ecommerce platform providers, ATG being the other, were both acquired for $1 billion or more. With these lofty valuations, it just further highlights the shift in consumer shopping preferences to the online world and the upcoming investment that retailers will need to make to meet the demand."

The number of shares to be offered and the price range for the offering have not yet been determined. A registration statement relating to these securities has been filed with the Securities and Exchange Commission but has not yet become effective. See the filing on the SEC website.

About the author:

Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.

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