Cash-rich car parts market developer PartsTrader Markets has laid off around half of its development team to focus on driving growth through sales and marketing.
Around 50 staff have been made redundant, 32 at the company's headquarters in Wellington, New Zealand, and 18 in the US, general manager Andrew Morrow confirmed.PartsTrader entered the US market in 2012. In February it raised US$30 million through the sale of stock to Todd family company Todd Technologies, Accident Compensation Corporation and fund manager Milford's Active Growth Fund among others.
Morrow said PartsTrader ramped up development from about 50 to 100 staff over a year ago to address demand from the US business.
"That's been very successful. There's obviously a lot of demand from the US and we've delivered a whole lot of new product features and integrations with other systems."
Morrow said these included PartsTrader 3.0, data warehouse, management reporting and a shop management system for repairers with improved workflows around quoting.
"We've reached a point where we really need to focus on sales and marketing. It's a switch in resources and we are still keeping a team of fifty with significant capability.
"The huge demand has been met."
PartsTrader has gone from around a dozen people in 2012 to over 150 even after the restructuring, he said.
The company has been operating business-to-business online marketplaces for over a decade mainly in parts for collision repairs. Over $3 billion in parts have been traded on the market since it began operations.
In New Zealand it has also expanded from servicing collision parts into general mechanical repairs.
Morrow said the market has gone from being a small profitable company to much greater scale with the US expansion and other offshore opportunities now being pursued.
In 2014, PartsTrader introduced its subscription revenue model into the US. This year transactions fees were introduced. Both contributed to the focus on product development over that period, he said.
PartsTrader now has critical mass in the US, he said, with 7000 repairers and 8000 suppliers across 48 states.
PartsTrader has been controversial and faced pushback from repairers in particular who feared loss of the margin they made on parts.
Rex Crowther, editor of collision repair industry magazine PanelTalk, was one of those critics, but told ZDNet the platform is now more generally accepted.
PartsTrader was originally set up with IAG as its main sponsor in New Zealand, he said. After around three years it went broader with other insurers.
"I think PartsTrader thought that was the answer, to go to the insurance companies, and it was to get started. But now they've realised they have to get the repairers on side to get them to use it more."
At the start the repairers weren't really considered, he said.
"They've really changed the way they market themselves to the repairers and it's become much more user friendly. It's a much better product."
Crowther said it also seemed to have gained more acceptance in the US.
"In the online forums that I follow it hasn't been an issue, where it was alive with them about a year ago. It's like here, it is part of the landscape."
PartsTrader was named electronic commerce company of the year at the Collision Industry Electronic Commerce Association (CIECA) awards in the US last month.