Demandware Wins Bid For N2N Assets
VentureWire Alert - June 16, 2008
By Arwen Ungar
To continue to strengthen its e-commerce platform, Demandware Inc. bid on and won the assets of n2N Commerce Inc., a developer of similar technology.
Demandware won the sealed bid auction, which took place early in May, and included 10 n2N software packages for an undisclosed amount.
Both n2N and Demandware were backed with funds from General Catalyst Partners, but Demandware Chief Executive John Pearce said the company's backing had nothing to do with the decision to bid for the IP.
General Catalyst could not be reached for comment.
Pearce did not provide details about the winning bid or further details about what portions of n2N's intellectual property would be integrated into Demandware's similar platform.
"Our strategy for bidding for it was to acquire it for an appropriate price," Pearce said. "We were able to acquire it at a value. We can leverage the pieces of the IP that were made available and only use the pieces that would further the mission and vision of the company."
Although Pearce did not provide specific details about how the IP would be integrated into Demandware, he said the company was not planning to build out n2N's business mission.
Based in Cambridge, Mass., n2N planned to offer a cross-channel platform that integrated e-commerce, call center and order management applications.
Similarly, Demandware provides an on-demand e-commerce platform that enables multi-channel merchandisers to continuously control and optimize the customer experience.
Pearce said the addition of n2N's technology gives Demandware a "unique opportunity" to leverage complementary technology into its own IP, specifically in merchandising and other arenas. "This will enable us to add a little more meat to the bone," Pearce said.
Since it was founded in 2006, n2N was backed by at least $30 million from General Catalyst and retail conglomerate Limited Brands Inc., before n2N shut down and terminated all 70 of its employees in December after a dispute between investors in the company, VentureWire previously reported.
N2N was testing the product and was close to delivering it, but Limited Brands pulled n2N's only client, Victoria's Secret, which resulted in the closure of n2N, VentureWire reported.
While Limited Brands' pulling out of n2N could have been related to the economy, there was also a dispute between investors General Catalyst and Limited Brands, Larry Bohn, managing director at General Catalyst, told VentureWire in January.
Demandware is backed with at least $22 million from General Catalyst, North Bridge Venture Partners and individuals, according to VentureWire records.
Pearce said the company would continue to take advantage of acquisition opportunities in the future. This is the company's first acquisition.