Talking $17.5mm with Become.com’s Jon Glick

March 26, 2008

Become.com just announced that it raised $17.5mm in a Series C round from Texas Pacific Group Growth  (TPG), a large private equity / VC firm that’s previously done deals with Petco and Travelocity.

The last time I wrote about Become was back when they launched a complete site overhaul, integrating social aspects like shopping lists, putting more focus on users, product information / education, and reviews. Here’s an excerpt from Jon Glick, VP of Product Search when this was released:

From the outset Become.com blended product-focused web search with
comparison shopping.  What we started to see was a third information
source, UGC (user generated content), becoming increasingly important.
The new site design seeks to tightly integrate all three information
sources into a single experience.  Now users can compare products and
prices, research products using our 5.6B webpage index, and view/create
UGC all on the same page.  The goal is to make the site increasingly
comprehensive and engaging for shoppers and a more frequent destination
for them.  Also, we see a bright future for social shopping on the
web.  I don’t think any site has nailed the right online user
experience that taps the innately social nature of offline shopping.
This launch lets us offer features to users, get their feedback, and
move toward being the site that is truly able to bring social to
shopping.

I spoke with Jon last night to follow up on the success of these changes and, of course, how they plan on using all that cash!

What new or continuing initiatives are going to be made possible with the investment – improving search technology, expanding into other verticals, more partnerships like the one with the Washington Post, more aggressive SEM…?
This investment allows us to continue to grow the site aggressively and invest in core areas like user experience, search relevance and SEM.  We also now have the financial backing to expand into new verticals (sorry that I can’t pre-announce which ones) this year, whereas without additional funding we would have had to hold off for a while on some of our expansion plans.  For Become.com this is “step on the gas” money that will help us grow even faster.

Did recent changes to the site make Become a stronger candidate for such a large Series C (noticing how both Become has benefited strongly from increased traffic after UGC additions)?
I think it was a combination of factors.  Both organic and SEM growth have been strong; organic was the fastest growing segment of our traffic in 2007, and the site improvements were a big part of that.  The site “stickiness” more than doubled and we’re continuing to add features (ex. price drop notifications are coming out this week) to keep users engaged.  SEM has also really gotten rolling; we have five PhDs working on it and that’s really starting to pay dividends.  It’s amazing how advanced web marketing has gotten in just the last few years!  Having these diverse traffic and revenue streams really helped attract investment, along with a great team, and being in our 2nd quarter of profitability also made us attractive to investors outside the VC community.

Who are your key competitive targets? The obvious competitors (Shopping, Shop, NexTag), search engines (Google…well, and Google) or CSE 2.0 entrants (Pronto, TheFind, etc.)?
We don’t really focus on specific competitors.  There are a lot of players in this space and the cream will rise to the top, so we focus on how to make our site creamier.  When the team here discusses tactics we don’t say “how can we beat so and so?”, we say “how can we grow our traffic 30%+ next month and continue improve merchant ROI?”.  More and more users are discovering and using comparison shopping sites, and with $300MM of growth in the CSE space projected in 2008, there are enough new users to go after without targeting anyone’s existing base.

Michael Yang, CEO, also posted this on his blog:

We have been profitable for 2 consecutive quarters since Q4, 2007 and
our business is still going through a very fast growth. We now have
over 10 million unique visits to our site per month which is over 300%
growth from the same period last year. Everyone at the company and all
the investors are very happy with this investment. With the additional
funding we are going to invest in key areas of the business to
accelerate the growth with an eye toward IPO by the end of 2010. Our
goal is to become a top comparison shopping engine company in the world.

written by Scott Hurff — scott.hurff at channeladvisor dot com