eBay Competitor Bonanzle Raises $1 Million to Grow Marketplace
By Ina Steiner
Online marketplace Bonanzle has raised $1 million in angel funding, and Voyager Capital venture partner Geoff Entress has joined the board of directors. Mr. Entress referred to Bonanzle as being in the forefront of "social selling" and said its growth has been constrained by the size of the development team. "When you have an opportunity to build a product that can improve the person-to-person shopping experience by 10x, it makes sense to accelerate development to capture that opportunity."
Mr. Entress has invested in over 35 Pacific Northwest technology companies during the last decade, including Isilon Systems, which went public, the Coffee Equipment Company (acquired by Starbucks) and Shelfari (acquired by Amazon).
Bonanzle launched in 2008 and has been profitable since February 2009; it has 236,000 registered users and receives 1.5 million unique visitors a month. About 20,000 active sellers are responsible for almost 3 million listings. Bonanzle does not disclose sales figures.
Founder and CEO Bill Harding said Bonanzle focuses on the passionate sellers who know their products well and who can provide buyers with the same experience as if they were visiting a mom and pop store - providing "stuff that big, impersonal ecommerce marketplaces aren't getting right today - where the browsing and communication are as satisfying as the purchase itself."
Mr. Harding has talked about the desire to keep the user experience as simple as possible, a principle that came from his previous experience in the video game industry - he helped develop games such as The Sims for the Game Boy Advance platform.
Sellers agree that the site is easy to use and is fun, but the site's biggest challenge is the need for more buyers. Bonanzle did not directly address whether it would use some of the funding to go toward marketing and advertising, but it has said it wants to create a buyer protection program. The company currently purchases Google ads on 10,000 keywords and is about to launch a display ad campaign.
Mr. Harding began working on Bonanzle in 2007 and launched the site in September 2008. It currently employs four people, including its founder. It recently launched an order resolution center, and in October, Bonanzle launched an API that allows third-party developers to provide services and tools for buyers and sellers, but it remains in beta development.
Bonanzle closed the $1 million round of investment led by Seattle angel investor Mr. Entress with participation from Voyager Capital, Matrix Partners, Ignition Partners, Founders Co-op, Curious Office and other Seattle angel investors.
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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 firstname.lastname@example.org.
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