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As a software securities analyst for investment banking firm Canaccord Genuity, Richard Davis spends 200 days a year on the road visiting companies. He goes to public companies such as Oracle and Salesforce.com, but he also visits up-and-coming software companies he thinks will go public in the near future.
ChannelAdvisor: Aiding online retailers
I’ve known this company for several years, and during that time I’ve watched the firm mature and evolve. Several years ago, ChannelAdvisor was tightly focused on the eBay eco-system. Since then, the firm has emerged as a global aid for online retailers, helping them efficiently reach prospects.
This means ChannelAdvisor helps firms manage multi-channel outreach, whether that is down the street or on the other side of the globe. In 2010, the firm managed $2.8 billion in gross merchandise value from leading retailers like Saks, Dell, and Brookstone, and 30 percent of Internet Retailer Magazine’s Top 500 online retailers. It seems to us that Channel Advisor is a company on the move. We plan to pay much closer attention to this firm over the next few years.
Approximate size: $50-100 million in revenues.
Chegg: Digital textbooks, book rentals, and more
Chegg is much more than textbook rentals. The firm offers e-textbooks, course information, reviews and in some instances notes from a few dozen colleges. In addition, the company offers homework help. Basically, the firm is emerging as a go-to source of content (books, notes, comments, grade distribution, etc.) and coursework help. That seems like a viable plan for a big business to me.
I caught up with a Chegg board member recently and we spoke a bit about how the firm is single-handedly saving students millions of dollars on egregious textbook costs. I know this is true from personal experience with my children at college; textbook prices are way too high for the amount of updating that occurs year to year.
Approximate size: >$100 million in revenues.
Gift Side Story: Helping guys buy gifts
I arrived at Buck’s in Woodside a few minutes early for my breakfast with a long-time friend. I saw another fellow advance to the door at the restaurant, which was locked. He circled back, came up, and said hello. “Hey, I’m meeting some VCs around here for the first time and I was wondering if I should be wearing a suit or not?” I said no, unless he was a financial services software firm or he was going up to San Francisco proper where some people wear sport coats. He thanked me and I asked him what the name of his company was. “Gift Side Story,” he said. His name was Ankur Jain.
Jain said his company was a website that helped guys figure out what gifts they should get for their wives or girlfriends. You fill out a brief questionnaire about your significant other’s preferences and the software provides you with recommendations. It has a self-learning component that is designed to formulate better results based upon the more information that is put into it in terms of questions and responses to actual orders. There is also a real-time chat function available if you get really stuck, which is a nice touch.
You pick an item from the recommendations and it takes you to the site’s checkout page. Input your credit card info and presto, the gift wrapped item is on its way! The prices looked good with discount banners indicating 10-50 percent off deals.
Richard Davis is managing director of enterprise software for the brokerage firm Canaccord Genuity. Before joinging Canaccord, he spent 10 years as a senior analyst at Needham & Company. Previously, Davis was at Tucker Anthony, where he launched the firm’s Internet and enterprise software coverage.
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