A BigCommerce fish in a small pond
Fresh from a $15 million investment windfall, Aussie-owned Texas-based company BigCommerce plans to double its Sydney engineering team to support its lofty ambitions to become the global leader in software as a service (SaaS) e-commerce applications.
Although the company has established its global headquarters in Texas, where the sales force is based, co-founder Mitchell Harper said that its engineering team had remained in Sydney, where the company was founded two years ago.
It has ignored the trend of Australian companies to fully relocate their operations to satisfy American investors.
"We want to be a big fish in a small pond," Harper said. "We don't think there are too many sexy start-ups and software companies in Sydney."
It plans to double the 20-man team by the end of the year, with co-founder Eddie Machaalani saying that it was eyeing the top 1 per cent of Sydney's developer and engineering talent.
"We're very stringent about talent we bring in; the recruitment process is pretty tough," Machaalani said. "The top 1 per cent of people will churn out software a lot better and be a lot more innovative."
The company's web-delivered application allows companies to establish an e-commerce website. Its competitors are web giants, such as Yahoo, but it wants to be the global leader in the space, which is why it recently closed a $15 million Series A funding round with venture capital firm General Catalyst. The company thinks that there's opportunity for it, because the web giants aren't interested in that part of their business.
In just under two years, the BigCommerce customer base has grown to 20,000, Harper said, and it is growing five to six times faster than competitors (it grew ten-fold last year from 1000 to 11,000 customers).
Its software processed $200 million worth of actions last year, he said. In two years, it aims to be the number-one provider in the US and Canada, where 85 per cent of its customers are located.
However, it also plans a global expansion in mid 2012 into Europe and the Asia-Pacific region, and eventually envisages a 50/50 geographic split of US and global customers.
SWOT analyis
Strengths
The business is cashed up, has a huge growth rate and has a predominately American customer base.
Weaknesses
The disinterest from web giants raises questions over the overall value of the market. The company also relies on securing and keeping top Sydney-based developers, who are a very limited resource. Operations spread across two continents and time zones could be an issue, as the company grows.
Opportunities
The potential exists to become the poster-boy of SaaS e-commerce.
Threats
It is competing against web giants like Yahoo, which could crush BigCommerce if they really decided to attack the market.
Conclusion
Taking on incumbents isn't an easy thing to do, but the $15 million war chest means that BigCommerce is armed to the teeth in this battle. The tide could turn, however, if more well-known brands decide to enter the market.
Verdict: Boom