GlobalTranz Announces Acquisition of Logistics Planning Services

PHOENIX & MINNEAPOLIS--(BUSINESS WIRE)--GlobalTranz Enterprises, Inc., a leading technology-driven freight management solution provider, today announced it has acquired Logistics Planning Services (LPS), a leading managed transportation provider and freight brokerage company. The acquisition further solidifies GlobalTranz’ position as a top freight brokerage firm and significantly increases its market share in third-party logistics (3PL) services.

LPS has operated successfully for 30 years and has an extensive managed transportation client base as a result of its expertise in 3PL/4PL services. Its strong freight brokerage business brings added scale and capabilities to GlobalTranz. The LPS acquisition will also expand the types of freight GlobalTranz is able to move, adding large-scale and specialty freight management to the company’s roster of services.

“As a company that has always focused on customer success and long-term partnerships, we are extremely pleased to be joining a market leader like GlobalTranz,” said Kirsten Castillo Hall, chief executive officer of LPS. “GlobalTranz will enable us to more quickly grow our managed transportation and freight brokerage businesses, and provide us with a strong, innovative logistics technology platform that I know will be attractive to our clients.”

“Logistics Planning Services is a significant acquisition for GlobalTranz and we are excited to have the team on board,” said Bob Farrell, chairman and chief executive officer of GlobalTranz. “LPS will enable GlobalTranz to immediately increase its focus and market share in managed transportation, which is directly in line with our vision to further our leadership in the 3PL industry. In addition, LPS brings additional scale to our freight brokerage operations and extends the type of freight we can move for our clients. The LPS addition will further accelerate our company’s growth.”

About Logistics Planning Services

Logistics Planning Services (LPS) is a third-party logistics (3PL) company providing single-source transportation management and logistics services for customers throughout the U.S. and overseas. Through state-of-the-art transportation management technology and dedicated logisticians, LPS simplifies the shipping process while providing meaningful cost reduction and complete visibility to cargo throughout the supply-chain. For more information, visit www.shiplps.com.

About GlobalTranz

GlobalTranz is a technology-driven freight brokerage company specializing in LTL, full truckload, third-party logistics and expedited shipping services. GlobalTranz is leading the market in innovative logistics technology that optimizes the efficiency of freight movement and matches shipper demand and carrier capacity in near real-time. Leveraging its extensive freight agent network, GlobalTranz has emerged as a fast-growing market leader with a customer base of over 25,000 shippers. In 2017, Transport Topics ranked GlobalTranz as the 13th largest freight brokerage firm in the U.S. For more information, visit www.globaltranz.com and follow us on LinkedIn and Twitter @globaltranz.

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LexisNexis® Risk Solutions and Cortera team to provide lenders with better information to determine small business creditworthiness

Blending Cortera B2B trade credit with LexisNexis® Risk Solutions alternative data enables lenders to make smarter credit decisions that expand their small business portfolios

ATLANTA, May 3, 2017 /PRNewswire/ -- Today LexisNexis® Risk Solutions, a data and analytics company, announced that its robust suite of small business credit risk assessment products will soon incorporate trade credit from Cortera, the leading aggregator of business-to-business trade credit. It sources trade credit from more than 40 industries, including manufacturing, medical & lab supplies, food and beverage as well as transportation.

Business-to-business trade credit is a reliable reflection of the financial health of the company-supplier relationship, where spending and payment behavior are indicators of small business creditworthiness.

Upon the news, Jim Swift, CEO, Cortera stated: "When lenders use credit assessment tools that incorporate business-to-business trade credit, many limitations of traditional banking data alone go away. Lenders are able to create stronger analytics, and, in short, with a combined bank credit and trade credit view of customers, banks know more, sooner. That's powerful."

Lenders and credit managers will soon have access to small business credit scores, credit reports, risk attributes, and other solutions that incorporate Cortera business-to-business trade credit with LexisNexis Risk Solutions business and consumer alternative data. Additionally, versions of these products will be available for Small Business Financial Exchange Inc. (SBFE®) Members that include SBFE Data™. The combination of these three data sets gives lenders and credit managers more robust predictive insights than other solutions. With the holistic view across small businesses' bank credit, trade credit, and alternative data profiles, lenders can decision more loan applications, set terms accurately and bank small businesses earlier in their lifecycle.

"Small businesses are vital to the long-term economic growth of our nation," said Ben Cutler, senior director, Small Business Risk Management, LexisNexis Risk Solutions. "Our small business credit risk products leverage the broadest data to provide lenders with the best information on which to make a decision.  Given a large amount of credit is issued between businesses and outside of the typical banking system, we are excited to team with Cortera to provide insights into these important credit relationships.  This is important information made even more powerful when combined with our alternative data and SBFE Data.  The result is that more small businesses can be included in the financial system without adding unnecessary risks to lender portfolios. "

"This partnership will be valuable because lending to SMBs is fundamentally different from lending to commercial and industrial companies," said David O'Connell, senior analyst with financial research and advisory firm Aite Group. "When SMBs get into financial trouble, they tend to treat their bank debt like another trade payable. At both the portfolio and loan levels, lenders should be applying predictive analytics to as much payable related data as they can."

SBFE approved LexisNexis Risk Solutions as a Certified Vendor in 2015. LexisNexis Risk Solutions tests show that when blending data from various data sets, 60 percent more business profiles are visible on which a lender can make a solid credit decision and a 40 percent improvement in segmentation of applications at lower tranches of the scoring tiers occurs.

About LexisNexis® Risk Solutions

At LexisNexis Risk Solutions, we believe in the power of data and advanced analytics for better risk management. With over 40 years of expertise, we are the trusted data analytics provider for organizations seeking actionable insights to manage risks and improve results while upholding the highest standards for security and privacy. Headquartered in metro Atlanta, LexisNexis Risk Solutions serves customers in more than 100 countries and is part of RELX Group, a global provider of information and analytics for professional and business customers across industries.  For more information, please visit www.lexisnexisrisk.com.

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PetSmart is acquiring Chewy.com for $3.35 billion in the largest e-commerce acquisition ever

 

PetSmart has agreed to make the biggest e-commerce acquisition in history, putting a deal in place to snatch up fast-growing pet food and product site Chewy.com for $3.35 billion, according to multiple sources familiar with the deal.

The deal is a huge one by any standard — bigger than Walmart’s $3.3 billion deal for Jet.com last year— and especially for a retail company like PetSmart, which was itself valued at only $8.7 billion when private equity investors took it over in 2015.

But Chewy.com has been one of the fastest-growing e-commerce sites on the planet, registering nearly $900 million in revenue last year, in what was only its fifth year in operation. The company had been a potential IPO candidate for this year or next, but was taken out by its brick-and-mortar competitor before that. It was not profitable last year.

Chewy was founded in 2011 by Ryan Cohen and Michael Day, and built a cult following for its excellent customer service, large selection and fast shipping. It had quietly raised at least $236 million in venture capital from investors including Volition Capital, T. Rowe Price and BlackRock.

Its under-the-radar status was probably aided by the fact that it was headquartered in Fort Lauderdale, Fla., and not in a big e-commerce market like New York, Los Angeles or Seattle. But it did have a big name in the industry as chairman: Mark Vadon, who also co-founded Blue Nile and Zulily.

The deal seems like the type of bet-the-company acquisition by a traditional retailer that commerce-focused venture capitalists have been betting on for some time. While Walmart’s acquisition of Jet.com was a huge deal by e-commerce standards, it represented just a fraction of Walmart’s market value. Silicon Valley investors are surely hoping more will follow in PetSmart’s path, as brick-and-mortar retailers struggle to adapt to the impact of changing shopping behaviors.

PetSmart had announced its intention to acquire Chewy on Tuesday morning, but didn’t disclose a price. PetSmart is owned by a group of private equity investors led by BC Partners.

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Meet the Young Founders of Chewy.com, Which PetSmart Just Bought for $3.35 Billion

 

Retail chain PetSmart has acquired pet food and product site Chewy for $3.35 billion on Tuesday, Recode reported. The deal is the largest e-commerce acquisition in history, beating Walmart's $3.3 billion acquisition of Jet.com in August 2016.

Chewy is one of the fast-growing e-commerce sites. In 2016, after just five years of operation, it counted nearly $900 million in revenue. The Fort Lauderdale-based company is known for its 24-hour customer service and sells products for dogs, cats, birds, reptiles and even horses.

CEO Ryan Cohen and CTO Michael Day launched the company in 2011, after meeting in a Java chat room. Cohen, 31, was working in affiliate marketing, the practice of collecting fees for referring customers to e-commerce sites, and met Day when trying to find a programmer for his website. Day dropped out of the University of Georgia to help him and eventually the two put $150,000 of their own money into an online jewelry startup. After attending a trade show, the pair realized they didn't have the passion for the business and sold their inventory for 80 cents on the dollar.

After ditching the jewelry business, Cohen and Day collected what was left in their personal bank accounts and started buying pet products from distributors. Once they found a third-party fulfillment center in Pennsylvania, they launched the site and matched the online prices of competitors.

Investors saw the company's appeal and Chewy raised $236 million in venture capital in late 2013. What's more, the online pet supply retailer saw a 2017 IPO as a possibility, but needed to become profitable (a feat it had not yet achieved).

Cohen and Day are tapping into a huge industry. In 2015, consumers spent a total of $60.2 billion on pet products and services, according to the American Pet Products Association. Since its inception, Chewy has attracted 3 million customers and has 4,000 employees.

PetSmart, which was valued at $8.7 billion in 2015, is expected to close the deal at the end of this year's second fiscal quarter. The company is owned by a group of private equity investors led by BC Partners.

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Fast-Growing Pet-Product Upstart Chewy Is Selling Out To PetSmart For A Reported $3.35 Billion

 

Chewy, the online pet product startup that rocketed to nearly $1 billion in reported sales in the space of five years, may have just set a record for the richest acquisition in Internet history. Earlier today we reported Chewy's sale to brick and mortar rival PetSmart, the nation’s largest pet store chain, for an undisclosed sum. (Forbes wrote about Chewy in January: “The Man Who Found Gold In Dog Food.”) Now tech news site Recode is reporting that "multiple sources familiar with the deal" say the price is $3.35 billion. That would edge Chewy above the previous record, set when Wal-Mart bought Jet last August for $3.3 billion.

Neither company is commenting beyond a press release from Phoenix-based PetSmart, which touts the deal as “a critical milestone in [PetSmart’s] transformational journey.” With $7 billion in revenue and more than 1,500 stores, 30-year-old privately held PetSmart opened 73 net new stores last year, but its same store sales, and same store sales at rival Petco, have been flat, according to a competitor who didn't want to be quoted critiquing a rival. Chewy, fueled by $236 million in venture capital, was siphoning off sales of bulk items like 40-lb. bags of dog food, which it offers to new customers at a discount, with free shipping. In recent months, Chewy said its revenue had exceeded $100 million a month.

While PetSmart still attracts customers with services like grooming and on-site veterinarians, it can’t ignore competition from online pet product sellers, says retail consultant Sucharita Mulpuru. That includes Amazon and Jet, both of which have been posting strong pet product sales. “The large players are all really eager to figure out how to win in digital,” she says. “They see upstarts coming out of nowhere, executing really well. To acquire them leapfrogs them to a level of digital excellence.” One of Chewy’s strengths is its 24-hour customer service, which 31-year-old Chewy cofounder and CEO Ryan Cohen has described as “Zappos on steroids.”

Chewy was growing at a breakneck pace, with a headcount of 3,400 at its 70,000-square-foot Dania, Fla. headquarters. As recently as 2012, cofounder Cohen, a college dropout from Montreal, was fielding rejections from Silicon Valley venture firms. But in late 2013, Boston’s Volition Capital, which seeks fast-growing ecommerce plays, invested $15 million in Chewy, followed by five more investors including BlackRock and T. Rowe Price. Chewy plowed the cash into staff and infrastructure, including a 600,000-square-foot fulfillment center in Mechanicsburg, Pa., opened in mid-2014.

At most fast-growing startups, notes Mulpuru, “entrepreneurs have a very, very inflated sense of self,” and no matter what the price they are offered, they prefer to push ahead on their own. "We want to be the No. 1 pet retailer in the world," Cohen told Forbes late last year. The most dramatic example of a founder turning down a big deal: Groupon CEO Andrew Mason’s refusal to sell his daily deal site to Google for $6 billion in 2010. 

When Forbes wrote about Chewy in January, Mulpuru pegged its value at $4 billion. Now she wonders whether the $3.35 billion price tag is too high. Though Cohen maintained that Chewy's unit economics were in the black, the company wasn't yet profitable and a pet industry veteran who knew three people familiar with Chewy's finances, was skeptical it ever would be, given customer acquisition costs that he pegged as high as $200 each. "I would have thought it was a great acquisition at less than $1 billion," says Mulpuru, but at $3.35 billion, Chewy may not be worth the price.  She points to eBay's $2.6 billion purchase of Skype in 2005, which it wrote down by $1.4 billion two years later. "Just because you buy an Internet darling, there is not always a path to profitability," she says. "If there's no path to profitability, then you've bought a dog--no pun intended."

According to the release from PetSmart, Cohen will remain at Chewy as CEO and Chewy will “operate largely as an independent subsidiary.”

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PetSmart Buys Online Pet Retail Rival Chewy.com

 

PetSmart has agreed to acquire online pet retailer Chewy.com in the latest deal by a brick-and-mortar titan for an e-commerce upstart.

On Tuesday, PetSmart—which was acquired a few years ago for $8.7 billion in a private equity backed leveraged buyout—said it agreed to buy Chewy.com to accelerate the company's efforts to sell pet products and services both in physical stores and online in North America. The deal is expected to close by the end of PetSmart's second fiscal quarter of 2017.

While terms of the transaction weren't disclosed by the partiesRecode—citing multiple sources—put the acquisition price at $3.35 billion in cash and near the $3 billion Wal-Mart Stores (WMT, -1.55%) paid for e-commerce startup Jet.com last year. A source with knowledge of the deal told Fortune that price was "inaccurate."

Regardless of the price, the acquisition is yet further proof that brick-and-mortar retailers want to get serious about how to compete in a world where more consumer spending is gravitating to online sources. That pivot in spending has resulted in retail bankruptcies at a pace that hasn't been seen since the financial crisis and hundreds of store closures. The surviving chains are quickly realizing that a compelling e-commerce strategy is needed to better compete. And while many brick-and-mortar chains have bulked up on their own internally developed operations, e-commerce startups like Chewy.com have in many ways been more savvy and have successfully stolen market share.

Chewy.com was only founded in 2011 but it already grew to generate over $880 million in sales in 2016 and the company was projecting to achieve over $1.5 billion this year.

"Retailer and e-commerce is all about execution. The barriers to entry are pretty low," Chewy CEO Ryan Cohen told Bloomberg in an interview last year. "We obsess over of customers and we know the products better than any other pet store."

Cohen had said that his goal was to build Chewy.com into a $10 billion business, though now, he will have to aim for that target under PetSmart's watchful eye. Following the closing of the deal, PetSmart said Chewy.com will still be led by Cohen and will operate "largely" as an independent subsidiary.

Chewy.com was often rumored to be a potential candidate for an initial public offering in 2017. The takeover eliminates that exit path, though other pet-focused companies have gone public in recent years, including Blue Buffalo Pet Products and Freshpet. PetSmart's main brick-and-mortar rival Petco also considered going public, but instead sold itself for around $4.6 billion in late 2015.

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A low-flying pet supplies company just sold to PetSmart in the biggest e-commerce sale ever

 

If you haven’t heard of Chewy, you aren’t alone. But PetSmart, the retail giant with more than 1,500 stores across the U.S., has clearly been tracking the low-flying, five-year-old pet supplies company. According to Recode, it just agreed to purchase its young rival for a stunning $3.35 billion, just slightly more than Walmart paid for Jet.com last year.

This editor only heard of Chewy for the first time last fall, when talking with one of its earlier investors, Larry Cheng of the Boston-based growth equity fund Volition Capital; Volition had written Chewy its $15 million Series A check in 2013, and the company had been growing quietly like a weed, he’d told me.

By design, that began to change late last year, when Bloomberg wrote a long profile about the Dania, Fla., company and the $236 million it had subsequently raised from investors, including BlackRock and New Horizon, the venture arm of mutual fund T. Rowe Price. Until then, said its chairman, billionaire e-commerce veteran Mark Vadon, his advice to the team had been to keep a low profile to better to avoid competition.

It was something of a feat. By the time Bloomberg published its story, the company had more than 3,000 employees and more than $880 million in annual revenue.

Its apparent key to success: personalization, from writing customers hand-written thank you and holiday cards to dedicating roughly one-sixth of its employees to customer service so pet owners’ questions could be answered quickly. Free shipping on orders over $49 also helped.

Perhaps as a result, the company hadn’t yet reached profitability, Bloomberg noted, but no matter. By the time its report was published, Chewy was reportedly talking with Goldman Sachs about preparing an IPO for this year.

No doubt Walmart and Amazon were following its moves, too. Another big profile that ran in Forbes in January reported that Chewy controls 43 percent of the online sales of pet food and litter in the U.S., just behind Amazon’s 48 percent.

As it turns out, Chewy’s traction proved the most irresistible to PetSmart, for immediate strategic reasons. PetSmart was taken private for $8.7 billion in 2014 by the private equity firm BC Partners, and as part of an overhauled designed to fuel its future growth, the company has been shifting more of its business online. Chewy also has a great reputation with its customers, which is less uniformly the case for PetSmart. Indeed, in a statement today, PetSmart CEO Michael Massey said of the deal, “Chewy’s high-touch customer e-commerce service model and culture centered around a love of pets is the ideal complement to PetSmart’s store footprint and diverse offerings.”

The acquisition is expected to close by the end of PetSmart’s second fiscal quarter of 2017.

Chewy cofounder and CEO, Ryan Cohen — who dropped out of college in Montreal to become an entrepreneur — will continue to lead Chewy as an independent subsidiary of the company.

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PetSmart Announces Agreement to Acquire Chewy, A Leading Online Pet Retailer

Combined Company Provides Most Convenient Customer Experience Across Brick and Mortar and Online Channels

 

PHOENIX--(BUSINESS WIRE)--PetSmart, Inc. (“PetSmart”) today announced it has entered into a definitive agreement to acquire Chewy, Inc. (“Chewy”), the online pet retailer. The acquisition accelerates the execution of PetSmart’s strategy and is a critical milestone in its transformational journey to be the most convenient, best-in-class pet retailer. The combination of PetSmart and Chewy will enhance both companies’ capabilities and reach, offering the widest selection of pet products and services available both in-store and online in North America. The acquisition, which is subject to customary regulatory approvals, is expected to close by the end of PetSmart’s second fiscal quarter of 2017.

“PetSmart strives to be the trusted partner to pet parents and pets in every moment of their lives,” said Michael Massey, president and chief executive officer of PetSmart. “We are focused on improving our customers’ experience in-store and online as we continue to execute against our long-term strategic initiatives. Chewy’s high-touch customer e-commerce service model and culture centered around a love of pets is the ideal complement to PetSmart’s store footprint and diverse offerings. Together, PetSmart and Chewy will provide the most convenient customer experience to a wider base of pet parents across every channel.”

Chewy is one of the leading online retailers of pet products and has seen extraordinary growth since it was founded by Ryan Cohen and Michael Day in 2011. Chewy’s position in the growing, underpenetrated online pet retail segment complements PetSmart’s strong footprint in brick and mortar, with over 1,500 stores and 55,000 dedicated associates across North America. In addition to providing a “wow” customer experience, Chewy’s extensive product selection and subscription model have attracted and retained a significant customer base that has contributed to the growth of customer purchasing through online channels.

“Since we started Chewy, we have been dedicated to understanding and satisfying the evolving needs of our customers to deliver the highest quality pet products and customer service,” said Ryan Cohen, co-founder and CEO of Chewy. “Combining our strong e-commerce expertise with PetSmart’s best-in-class infrastructure, footprint and breadth of offerings including services will help us ‘wow’ our customers even more.”

Upon closing, Chewy will continue to be led by CEO Ryan Cohen and operate largely as an independent subsidiary of PetSmart, focusing on its current business strategy, while PetSmart will continue to execute its strategic initiatives across the combined company. Both companies will use their shared innovative capabilities and offerings in order to deliver the most value and convenience to customers.

Both companies share a common goal to improve the lives of pets and people, dedicating significant time and resources to nonprofit animal welfare organizations. PetSmart Charities is the leader in pet adoptions, having facilitated more than 7 million adoptions since 1994, and the largest funder of animal welfare in North America. This organization is complementary to Chewy’s philanthropic efforts, including the Chewy.com Rescue and Shelter Network.

Financial advisors to PetSmart on this transaction were Citi and Barclays, with Simpson Thacher & Bartlett LLP acting as its legal advisor. Citigroup Global Markets Inc. and Barclays also provided committed financing for the acquisition. Equity financing is being provided by PetSmart’s existing shareholders. Financial advisor to Chewy on this transaction was Allen & Company, with Weil, Gotshal & Manges LLP acting as its legal advisor.

About PetSmart

PetSmart, Inc. is one of the largest pet retailers of services and solutions for the lifetime needs of pets. At PetSmart, we love pets and we believe pets make us better people. Every day with every connection, PetSmart’s passionate associates help bring pet parents closer to their pets so that together, they can live more fulfilled lives. This vision impacts everything we do for our customers, the way we support our associates and how we give back to our communities. We employ approximately 55,000 associates, operate more than 1,500 pet stores in the United States, Canada and Puerto Rico, as well as more than 200 in-store PetSmart® PetsHotel® dog and cat boarding facilities. PetSmart provides a broad range of competitively priced pet food and products, as well as pet-focused services such as dog training, pet grooming, pet boarding, PetSmart ® Doggie Day Camp® and pet adoption. PetSmart, together with non-profits PetSmart Charities® and PetSmart Charities™ of Canada, invite more than 3,000 animal welfare organizations to bring adoptable pets into stores so they have the best chance possible of finding a forever home. Through this in-store adoption program and other signature events, PetSmart has facilitated more than 7.3 million adoptions – more than any other brick-and-mortar organization. PetSmart also operates AllPaws, an online pet adoption platform that helps potential pet parents find the perfect pet to adopt based on their home, family and lifestyle. PetSmart offers the most comprehensive pet care information in the U.S. In celebration of its 30th anniversary, PetSmart launched its Buy a Bag, Give a Meal™ program in March 2017. For every bag of cat or dog food purchased March 1 – Dec. 31, 2017, PetSmart will donate a meal to pets in need and expects to donate more than 60 million meals in 2017.

About Chewy

Chewy is a leading online retailer of pet food and products in the United States. Founded in 2011 by entrepreneurs, Ryan Cohen and Michael Day, Chewy set out to offer pet parents the expertise and service of a local pet store with the convenience of online shopping. Chewy delivers on that promise with its dedication to 24/7 customer service, creation of cutting-edge software and technology to enhance the user experience, and commitment to sourcing high quality products. Headquartered in Dania Beach, Florida, Chewy currently employs more than 5,000 pet lovers both in their home office, Boston office and fulfillment centers in Pennsylvania, Indiana, Texas and Nevada. For more information, visit www.chewy.com.

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Messagepoint Inc. Named One of Canada’s Top Small & Medium Employers

Award Recognizes Commitment to Employee Well-being, Innovative Culture

TORONTO--(BUSINESS WIRE)--Messagepoint Inc., a leader in developing and delivering innovative software and services within the Customer Communications Management (CCM) market, has been named as one of Canada's Top Small & Medium Employers for 2017. Winning companies were announced today by Mediacorp Canada Inc., the nation’s largest publisher of employment periodicals and manager of the competition. Employers are compared to other organizations in their industry to determine which offer the most progressive and forward-thinking programs.

“The defining features of employers on this year’s list are their flexibility to adapt quickly to changing conditions and the ease with which they can make improvements,” said Richard Yerema, managing editor of the Canada’s Top 100 Employers project at Mediacorp. “Since the competition was founded, we’ve observed that the leading SMEs have steadily expanded their benefits and HR initiatives—they offer job-seekers an attractive employment proposition combined with a dynamic and fun work environment.”

Founded in 1998, Messagepoint Inc., headquartered in the historic Queen’s Quay Terminal building in the heart of the Toronto waterfront, has a dedicated team of more than 80 consultants, designers, project managers and software developers. “Every day, our incredible team at Messagepoint strives to live out our corporate values, respecting the importance of accountability, agility, empowerment, innovation, integrity, candor and celebration,” said Steve Biancaniello, CEO of Messagepoint Inc. “We are grateful for being recognized with this award along with some terrific peer companies; and we remain deeply committed to providing a compelling workplace that enables our employees to proudly serve our great customers and partners.”

About Messagepoint Inc.

Messagepoint Inc. is a leader in developing and delivering innovative software and services within the Customer Communications Management market. The Messagepoint cloud-based platform helps companies strengthen their customer communications by enabling business users to control the entire messaging lifecycle for all print or digital communications without burdening IT. For more information, visit www.messagepoint.com.

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Interview with Manu Mathew, Co-Founder & CEO – Visual IQ

 

On Marketing Technology


MTS: Tell us a little bit about your role at Visual IQ and how you got here. (what inspired you to co-found a martech company)

Back in the early 2000s when digital was taking off, I was working on the Vonage account at a leading advertising agency. I was frustrated by my inability to use data to demonstrate how our campaigns impacted Vonage’s overall business goals to the company’s then CEO, a former finance expert who wanted to know exactly where, how and why his money was being spent. This frustration drove me to create Visual IQ in 2006, and launch an attribution solution that would enable marketers to leverage their data to gain an accurate and holistic view of performance, better allocate their marketing dollars, and prove the impact of their investments.

The company has grown significantly since 2006, and we now help some of the world’s largest and most successful brands manage, analyze and optimize their marketing and advertising spend. We’ve also significantly expanded the capabilities of our platform by adding audience data to the mix. In recent years, the balance of power has shifted from brands to consumers, who expect relevant and personalized experiences. By combining audience with attribution in a single platform, marketers can not only customize conversations with prospects and customers, but also optimize their spend within and across channels, devices and environments to drive engagement, sales, revenue and other desired business results.

MTS: Given the massive proliferation of marketing technology, how do you see the martech market evolving over the next few years?

We’re going to see a lot more consolidation. Today’s marketers use a multitude of tools and technologies to plan, execute, and measure the results of their marketing and advertising efforts. While these technologies provide access to more performance and audience data than ever before, its scattered across siloed systems with no easy way to tie it together.

To achieve ultimate effectiveness, marketers need the ability to combine the profile data they have about their consumers with analytics that provide a comprehensive view of their journey and the influence of each channel and tactic along their path to conversion. Only then can they match individual consumers with the right message, in the right place and at the very moment it’s relevant. In the age of the empowered consumer – where customers and prospects expect brands to know what they like and dislike based on their needs, preferences and behaviors – the ability to consolidate and normalize data from disparate adtech and martech solutions will become a marketer’s greatest asset.

MTS: What do you see as the single most important technology trend or development that’s going to impact us?

We’re going to see people-based marketing begin to dominate in the months and years ahead. Today, consumer expectations are soaring. They want their experiences with brands to be relevant, convenient and friction-free. Moreover, they expect brands to know them and earn their loyalty.

To continue acquiring and retaining customers, marketers need to deliver personalized ads, messages and experiences across online and offline channels, as well as devices. However, marketers have historically faced challenges recognizing customers and prospects across multiple screens and environments. Most of the marketing and advertising technologies marketers use today aren’t just siloed; they also generate their own unique identifiers for each individual consumer, making it difficult to get a comprehensive, 360-degree view of customers and prospects. A people-based approach combines all of these disparate digital, device and offline IDs into a single anonymous identifier.

The result is a comprehensive, end-to-end view of the consumer journey and how customers and prospects engage with a brand, regardless of where that interaction occurs. When these robust profiles are used to feed the attribution process, marketers get the actionable intelligence they need to optimize their budget across touchpoints, and deliver tailored messages and experiences at key moments of opportunity – whether online, across devices, in stores or elsewhere.

MTS: What’s the biggest challenge that CMOs need to tackle to make marketing technology work?

Harnessing the massive amounts of audience, marketing and business data that CMOs need to inform and enhance their efforts is probably the biggest challenge. Managing advertising and marketing channels separately using channel-specific strategies, tactics and metrics is no longer effective. To be successful, marketers need to move away from channel and functional siloes and operate through the lens of the consumer.

Sophisticated marketing intelligence platforms can help corral all of this disparate data to provide a consolidated view of the consumer and every marketing interaction leading up to a given success criteria (engagement, conversion, in-store visit, etc.). Armed with clarity around consumer attributes and how different audiences interact with your brand across channels and devices, marketers can optimize budgets and create the types of relevant and coordinated experiences that drive meaningful business results.

MTS: What would be your advice to CMOs when they start planning to invest in marketing technologies?

Introducing technological change in an organization can present a number of challenges. I typically advise CMOs to clearly define their business goals before investing in any solution. Every business has different metrics for success, and it’s important that CMOs understand what those measures are and what’s important to both their direct team, as well as executive leadership.

Operational aspects of technology investments are also often overlooked, such as team structure, workflows and training, and these factors can come back to bite you well after it’s too late to turn back. Success relies on dedicating time up front to educate internal stakeholders on the new technology, how it works, the timelines for implementation and adoption, and most importantly, the financial impact to the enterprise.

MTS: A lot of martech companies are preparing for an IPO. What are the factors that CEO considers before filing an IPO?

Deciding whether a company can, or should, go public is not an easy decision. There are a number of factors to consider, from sales and revenue projections to the management team itself. For instance, above industry average growth rates, a solid sales pipeline with indicators of continued growth, and strong revenue growth projections of the space by industry analysts are all important factors to look for. Moreover, preparing for an IPO can be a lengthy process, so CEOs need to make sure they have sufficient capital to see the company through to a successful public offering.

Finally, a strong management team must be in place. The demands of becoming a public company often require additional strengths and capabilities, from strong senior and mid-level management who can clearly articulate the company’s vision, to experienced bankers, legal counsel and audit partners who understand the complex financial and accounting requirements of going public.

MTS: What startups are you watching/keen on right now?

– Gainsight
– Asana
– Insidesales.com
– Visual IQ 

MTS: What tools does your marketing stack consist of in 2017?

Our marketing stack leverages a number technologies to drive our marketing and advertising efforts, from CRM systems and email platforms, to analytics tools, customer success platforms, and learning management systems. In 2017, we will add marketing automation and content curation tools to this stack as well. Perhaps most exciting, we also plan to leverage our platform to apply multi-touch attribution to our own efforts, so we can better understand which touchpoints drive performance and optimize accordingly.

MTS: Could you tell us about a standout Visual IQ campaign? (Who was your target audience and how did you measure success)

We recently announced the results of a very successful Facebook pilot program with our client, O2. As a business, O2 understood the reach, targeting and engagement value of Facebook, but third-party tracking limitations on the social platform prevented the company from measuring its effectiveness to the same degree as its other digital efforts.

Through a partnership with Facebook, we were able to ensure that information about O2’s Facebook campaigns, including its Custom Audience placements, were included in the attribution process. By integrating previously untracked Facebook touchpoints into our platform, O2 was able to eliminate blind spots in the consumer journey and measure the value of their Facebook investments relative to other digital channels, publishers and placements for the first time.

Not only was Facebook proven to be a key component of O2’s marketing and media strategy, but the company also uncovered some unexpected performance insights. For instance, O2 saw converter rates improve by 16% to as high as 123% when Facebook Custom Audience ad placements were used in combination with other digital channels, such as affiliates, paid social and paid search. The pilot also revealed the importance of people-based marketing and the efficiency gains driven by Facebook. When Custom Audience impressions were included in the broader tactical mix, O2 saw a 52% improvement in cost efficiency for new customer acquisition, and a 38% improvement for existing customers.

MTS: How do you prepare for an AI-centric world as a marketing leader?

Marketers have long referred to the ability to deliver the right message, to the right person, at the right place and time as the holy grail of marketing. But this isn’t possible without the ability to aggregate and analyze huge repositories of data. AI provides a way to uncover audience and performance insights to across huge sets of data, incredibly fast. For marketers, this means having actionable intelligence at their fingertips, so they can match the right content, offer, product, etc., to the right person at the right time, via the channel of their choice with greater speed and efficiency than ever before.

 

This Is How I Work

 

MTS: One word that best describes how you work.

Accessibility.

MTS: What apps/software/tools can’t you live without?

In addition to my newsfeed app, I use the Expensify and Salesforce apps regularly. Both are great for busy executives on the go.

MTS: What’s your smartest work related shortcut or productivity hack?

I love GoodNotes. It enables me to take notes directly on my iPad and instantly converts my handwriting into text. It’s a great time-saver.

MTS: What are you currently reading? (What do you read, and how do you consume information?)

I like to start my day with the Wall Street Journal and end it with a good novel.

MTS: What’s the best advice you’ve ever received?

From my father, who encouraged me to leave home and come to the US to pursue higher education. Even though the pull was to stay in Botswana, a place of comfort, he allowed me to test my wings and move on to the next thing. The journey teaches many lessons in life, and it’s important to always move forward knowing the best is yet to come. In the process, always be happy, as nothing else matters.

MTS: Something you do better than others – the secret of your success?

Team collaboration is big for me. It’s absolutely essential and critical—not only for building stronger relationships between our internal teams, but also with our clients.

MTS: Tag the one person whose answers to these questions you would love to read:

Richard Branson

MTS: Thank you Manu! That was fun and hope to see you back on MarTech Series soon.

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JazzHR Introduces Game-Changing Recruiting Tool for Small Businesses

Self-service, Scalable Offering Enables Small Businesses to Benefit from Company's Award-Winning Recruiting Platform

PITTSBURGH, April 5, 2017 /PRNewswire/ -- JazzHR, the leading recruiting solutions provider for small and medium-sized businesses (SMBs), today announced the launch of JazzHR Hero, a powerful, easy-to-use recruiting solution specifically designed and priced for small and growing businesses. Disruptively priced at less than $50 per month, JazzHR Hero simplifies and streamlines repetitive recruiting processes to reduce the cost, complexity and hassle associated with hiring. 

In today's competitive talent market, successfully attracting and hiring top talent is mission-critical for small businesses, who have limited options when it comes to hiring technologies. With the introduction of Hero, JazzHR makes it easy for anyone single-handedly coordinating the hiring process, or small teams with limited internal resources, to effectively coordinate sourcing, interviewing, hiring and other recruiting activities.  This includes small business CEOs, HR professionals, recruiters and others who aren't ready to invest in an organization-wide, collaborative recruiting system, but need a scalable solution to manage the many facets of recruiting.

"At a small business, recruiting is just one item on a long laundry list of top priorities, often with a single person running point and relying on pen, paper and spreadsheets to stay organized," said Pete Lamson, CEO of JazzHR. "With Hero, you don't need to be an industry-trained recruiter to make a transformative hire. Hero provides simple, powerful tools to hire better candidates faster, at a price point designed for small business budgets."

With Hero, small businesses can post jobs in minutes and gain instant access to a comprehensive recruiting solution with features including; customizable career pages for their website, syndicated job listings, mobile resume screening, candidate questionnaires and background checks. Hero includes Microsoft Outlook and Gmail calendar syncing between team members and candidates, and the ability to directly import new hires into a businesses' Human Resources Information System (HRIS), eliminating time spent on manual input.

Available immediately, pricing for Hero starts at just $49 per month, with the option to select additional features à la carte. To activate a free trial today, or purchase a monthly subscription, visit www.JazzHR.com, email hello@jazzhr.com, or call 888 885 5299.

ABOUT JAZZHR
JazzHR is a powerful, user-friendly and affordable recruiting software that is purpose-built to help growing SMBs exceed their recruiting goals. JazzHR's groundbreaking software replaces time-consuming, manual hiring processes with intuitive hiring tools that help recruiters and hiring managers build an effective recruiting process that results in great hires. To learn more about JazzHR, visit www.jazzhr.com or follow us at twitter.com/JazzDotCo.

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Independent Research Firm Cites Insite Software as a Leader in B2B Commerce Suites, Q1 2017

March 24,  2017 – Minneapolis, Minn. – Insite Software, a leading B2B commerce platform,   was among the select companies that Forrester invited to participate in its March 24, 2017 Forrester Wave™ evaluation, entitled The Forrester Wave™ B2B Commerce Suites, Q1 2017. Forrester identified the 11 most significant companies in the category and evaluated them against 35 criteria. Insite’s top scores in the current offering category were in the  Customer-facing Digital Touchpoints, Solution Architecture, and Commerce Management current offering criteria.

According to the report, “with customers now expecting deeper research experiences and richer purchase journeys, vendors must deliver new capabilities both on the back end around fulfillment and integration and on the front end around seamless and innovative customer experiences.”

“We believe the fact that Insite has been cited as a Leader in this report is a reflection of our commitment to the unique needs of our B2B industry clients, and the ability of Insite technology to support the complex requirements of the B2B eCommerce environment,” said Steve Shaffer, CEO of Insite Software. “Our solution is built for B2B. With so much core functionality out of the box, we’re able to deliver successful eCommerce systems faster, smarter and with less customization. And our clients are benefitting as a result.”

Each vendor included in the report possesses the following criteria:

  • Illustrates a strong focus on B2B commerce.
  • Possesses critical components of a standalone B2B commerce suite.
  • Has sizable revenue and a large overall customer base.
  • Owns significant mindshare and has a base of global, enterprise customers.[1]

According to Forrester, “Minneapolis-based Insite has joined the ranks of the established players in the B2B commerce space, with an increasing number of companies now reporting that they’re factoring Insite into their B2B eCommerce software consideration set. Insite has a strong vision for a unified value proposition that includes eCommerce and salesperson-centric and persona-driven selling. Customers consistently describe Insite as laser-focused on B2B and especially client-focused — with one customer calling Insite a ‘company that cares’.”

The methodology for The Forrester Wave™: B2B Commerce Suites, Q1 2017 includes primary research, user need assessments, vendor and expert interviews, and 35 evaluation criteria. To access The Forrester Wave™: B2B Commerce Suites, Q1 2017, please visit http://www.insitesoft.com/resources/reports/forrester-b2b-commerce-suite-wave-q1-2017/

About Insite Software – Built for B2B™, Insite Software is a leading commerce platform for manufacturers and distributors that unifies e-commerce, sales channels, content and data to power superior commerce experiences across the enterprise. Insite’s revolutionary technology integrates with leading ERP, PIM and other popular solutions common in the B2B industry. Flexible deployment can occur on premise and within public or private clouds. For more information, visit Insite Software at insitesoft.com.

 

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Chewy.com to Employ 700 in South Dallas

 

Since opening its local fulfillment center in February, the company has hired 360 people and plans to reach 500 employees in the next two weeks.


The newly opened Chewy.com fulfillment center in South Dallas accepted its first shipment at the end of February, and made its first shipment during the first week of March. The e-commerce pet retailer currently has 360 people working at the distribution facility and will reach 500 employees within the next two weeks, working towards reaching upwards of 700 total employees over time.

The Florida-based company, which sells pet food and pet-related products online, was founded in 2011 and brought in $26 million in 2012, its first full year. Last year the company recorded revenue of $900 million, a figure that’s projected to hit $2 billion in 2017. The company had existing fulfillment centers in Pennsylvania, Indiana, and Nevada. It’s keeping pace with its revenue growth by adding more fulfillment centers—one in Florida, one in Pennsylvania—in addition to the Dallas location. The Dallas facility on Grady Niblo Road is the company’s largest, at 663,000 square feet.

“Each of the fulfillment centers has our full catalogue, so we have close to 30,000 different products on our website, and [the Dallas location] will primarily serve all of the ZIP codes in the U.S. that it can reach in one to two days,” said Gregg Walsh, vice president of operations at Chewy.com. “So Pennsylvania will take the Northeast and Mid-Atlantic, Florida will have the Southeast, Dallas will have the South-Central portion of the U.S., Indiana the Midwest, and so forth, and then Nevada has the West.”

For Chewy, a top priority is the ability to reach each U.S. customer within one day of service. “Being in Texas gives us a very good footprint in the south and in the center of the country. So that was step one—that pointed towards Dallas,” Walsh said. Step two in bringing a fulfillment center to Dallas involved researching labor markets, in search of one that could support the large facility and sustain that work overtime. The third part was finding a suitable building. The team at Chewy was assisted by Mark Collins and Dean Collins of Cushman & Wakefield in securing its newest location.

“Lo and behold, we had this building here, so it was really a great match between location to our customers, great folks here in Dallas, and having a building that fit our needs,” Walsh said.

In addition to the fulfillment center, 10,000 square feet will be occupied by a photo studio that’s expected to be up and running by the end of April. The company will hire in-house photographers, videographers, and production assistants to photograph and make videos of its product there.

The planned capacity of the building is more than 1 million units shipped per week. That figure will be attained over time, as the company continues to fill the building with inventory.

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Trillium Health Selects TraceLink to Protect its Pharmaceutical Operations and Ensure Patient Safety

NORTH READING, Mass., March 21, 2017 /PRNewswire/ -- TraceLink Inc., the World's Largest Track and Trace Network for connecting the Life Sciences supply chain and eliminating counterfeit prescription drugs from the global marketplace, today announced that the Pharmacy at Trillium Health selected the TraceLink Life Sciences Cloud to comply with the U.S. Drug Supply Chain Security Act (DSCSA) regulations for pharmacies and ensure the delivery of safe medicines to patients.

Trillium Health, headquartered in Rochester, New York, was formed in 2010 as a result of the merger of AIDS Community Health Center and AIDS Rochester, to provide integrated, personalized primary and specialty medical care to people from diverse communities. Trillium Health extends services and programs into the community through education, support, and direct access to treatment with onsite pharmacies. 

The World Health Organization estimates that between 1% and 10% of drugs sold around the world are counterfeit, with that number reaching as high as 50% in some countries. In 2013, DSCSA was signed into U.S. law to combat counterfeit drugs and ensure patient safety by enabling verification of pharmaceutical products, improving the detection of suspect ones, and facilitating product recalls. By 2020, all hospital, retail and individual pharmacies must comply with DSCSA serialization regulations, only buying or selling prescription drug products with a unique product identifier on each package. 

"As a provider of affordable, accessible and quality health care for our community, we fully support DSCSA and are committed to ensuring the delivery of safe medicine to our patients," said Mark J. Malahosky, R.Ph., BPharm, Vice President of Pharmacy Services at Trillium Health. "In order to prepare for the upcoming serialization regulations for pharmacies, we chose TraceLink's solution to enable us to cost-effectively comply with DSCSA and connect directly to our wholesale partners."

"The DSCSA law introduces complexities for health systems and pharmacies right out of the gate and requires an increasingly digital state over time for hospitals and health networks. Trillium's dedication to delivering comprehensive primary and specialty care, in parallel with TraceLink's own mission of protecting patients and enabling quality health care, forms a shared vision that ensures compliance and patient safety," said Shabbir Dahod, president and CEO, TraceLink. "We look forward to working with Trillium Health and assisting them with safeguarding their daily pharmacy operations, allowing their healthcare providers to continue their patient-centric mission."

TraceLink's Product Track solution provides end to end compliance with U.S. Drug Supply Chain Security Act (DSCSA) tracing and verification regulations for hospitals, pharmacies and health networks. To learn more about how TraceLink can protect pharmacy operations, easily help meet DSCSA requirements and enable a direct connection with thousands of suppliers on the Life Sciences Cloud network, visit http://www.tracelink.com.

About TraceLink
TraceLink is the World's Largest Track and Trace Network for connecting the Life Sciences supply chain and eliminating counterfeit prescription drugs from the global marketplace. Leading businesses trust the TraceLink Life Sciences Cloud to deliver complete global connectivity, visibility and traceability of pharmaceuticals from ingredient to patient. A single point and click connection to the Life Sciences Cloud creates a supply chain control tower that delivers the information, insight and collaboration needed to improve performance and reduce risk across global supply, manufacturing and distribution operations. A winner of numerous industry awards including Deloitte's Technology Fast 500 (ranked number 149 in 2016), the Amazon AWS Global Start-Up Challenge Grand Prize, and the Edison Award for Innovation in Health Management, the Life Sciences Cloud is used by businesses across the globe to meet strategic goals in ensuring global compliance, fighting drug counterfeiting, improving on-time and in-full delivery, protecting product quality and reducing operational cost. For more information on TraceLink and our solutions, visit www.tracelink.com or follow us on LinkedInTwitter and Facebook.

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Visual IQ: O2 and Havas Uncover True Performance of Facebook Advertising

Visual IQ, the leading provider of marketing intelligence software, today announced the results of a Facebook pilot programme for leading telecommunications company O2 and its agency partner Havas. Visual IQ integrated previously untracked Facebook advertising impressions enabling O2 to measure the value of their Facebook investments relative to other digital channels, publishers and placements for the very first time.

Visual IQ announced its partnership with Facebook in September 2016 to help brands understand the performance of Facebook in combination with other advertising investments. Using Visual IQ’s multi-touch attribution capabilities, O2 was able to track consumer exposure to Facebook ads, including its Custom Audience ad placements, to understand the full effect of their Facebook ad spend on sales, how their Facebook ads impacted their other media, and how relevant their ads were to their target customers.

The Facebook pilot revealed remarkable results, enabling O2 to become the first brand to gain insight into how they should value Facebook relative to other marketing investments. In particular, the O2 and Havas teams saw the converter rate improve by 16% to as high as 123% when Facebook Custom Audience ad placements were used in combination with other digital channels such as affiliates, paid social and paid search. Additionally, the pilot revealed the importance of people-based marketing and the efficiency gains driven by Facebook. When Custom Audience impressions were included in the broader tactical mix, O2 saw a 52% improvement in cost efficiency for new customer acquisition, and a 38% improvement for existing customers.

“As a business, we understand the reach, targeting and engagement value of Facebook, but were previously unable to track and measure its effectiveness to the same degree as our other digital efforts,” explained Nick Adams, Head of Digital Excellence, Marketing Communications, O2. “As the first company to realise results from the pilot programme, it’s exciting to see exactly how our advertising investments in the social network impact sales. This insight will enable us to make more informed planning and optimisation decisions across our entire marketing mix going forwards, and ensure our ads are even more relevant to our prospects’ and customers’ needs.”

Havas has worked with Visual IQ to measure the impact of O2’s digital marketing efforts on sales and other desired business outcomes since 2015. Through the pilot, the agency was able to prove that investments in Facebook alongside other digital channels and tactics contribute to O2’s sales goals in a significant and cost-efficient way.

James Olney, Senior Business Analyst, Havas Media Group commented: “The inability to track our full media investments on Facebook made it difficult to demonstrate the actual value of the channel. Visual IQ’s partnership with Facebook was key to proving the platform’s true value, and how it can complement other channels and tactics to drive sales and other desired business outcomes.”

“Social networks are a vital component of brands’ people-based marketing efforts, but previous limitations in measuring Facebook media has been a barrier to understanding the true impact of this channel,” explained Manu Mathew, CEO and Co-founder, Visual IQ. “We’re thrilled this pilot has enabled O2 and Havas to understand the effectiveness of Facebook ads in a way that was never before possible. This knowledge will have a massive impact on brands and agencies who, until now, have been investing valuable funds into the channel with no clear way of knowing its true value.”

Visual IQ’s partnership with Facebook further enhances the company’s ability to provide audience insight and marketing performance within a single marketing platform. For the first time, Visual IQ clients can now understand the true impact of their Facebook spend across any Facebook properties and placements, including Facebook, Instagram, Audience Network and Custom Audience buys. In addition to O2, three other Visual IQ clients are also currently participating in the Facebook pilot programme.

About Visual IQ

Visual IQ is the world’s leading marketing intelligence software provider. Its IQ Intelligence Suite combines audience data with attributed measurement in a single platform, providing marketing and advertising performance insights based on audience segment and the inter- and intra-channel optimisation recommendations needed to drive business goals and maximise return. By offering media mix modeling, TV attribution and multi-touch attribution in a consolidated platform, Visual IQ is the only provider that delivers the comprehensive, audience-driven intelligence that brands and agencies need to optimise performance across their entire marketing and advertising mix.

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No. 1 online pet food retailer Chewy.com is aiming even higher

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C-founder Ryan Cohen has aggressively pursued the No. 1 position for online sales, but what he really wants is to become the largest pet retailer in the world.

 

MIAMI — The leading online purveyor of pet food and supplies almost never was. That’s because the founders of Chewy.com originally planned to go into the online jewelry business.

“We had actually bought jewelry inventory, and we were literally days away from launching the website,” says Ryan Cohen, Chewy’s 31-year-old chief executive officer. “We bought about $150,000 worth of jewelry. So we were that close to starting to sell jewelry.”

Cohen and Michael “Blake” Day, who met in an online chat room about computer programming, had pooled their money for the jewelry venture. They decided to sell everything at 80 to 90 cents on the dollar after Cohen convinced his business partner that pets had better market potential. Cohen came to that realization while shopping for his toy poodle, Tylee.

“I always wanted to do something with pets, but I couldn’t figure out how to monetize it,” he said. “So I was going to the pet store and realized the market online was really under-penetrated. I said, ‘This jewelry idea, we’re not passionate about what we’re doing. This is a much better opportunity.’ I understand the customer — because it’s myself. So we built the company.”

Cohen and Day redirected their finances and co-founded the company, which is headquartered outside Miami, in 2011. Neither holds a college degree, and at the start they lacked a business plan. But they had faith in their abilities, both having extensive experience with computers since their teens, Cohen said.

The privately held company registered $26 million in sales during its first full year in business. Chewy has since grown to 3,700 employees and is projected to increase revenues to nearly $2 billion this year — nearly a 7,600 percent growth spurt in just six years.

According to 1010Data, Chewy.com rules the online sales of pet food, with nearly 51 percent of the online market, including 40.5 percent in direct sales and 10.2 percent in subscription sales. The nearest competitor isn’t even close. Amazon.com cornered nearly 35 percent of the market, with 23.5 percent in direct sales, 7.6 percent in subscriptions and 3.6 percent at retail. By comparison, Walmart.com has less than 1 percent of the online market share.

Cohen has aggressively pursued the No. 1 position for online sales, but what he really wants is more of the overall market for pet food and supplies.

According to the American Pet Products Association, pet owners in the United States spent an estimated $62.75 billion on their animals last year, with $24.01 billion on food and $14.98 billion in supplies and over-the-counter medicine, making their target market roughly $40 billion. At $2 billion in sales, Chewy would command roughly 5 percent of the market.

“So if you look at where we are today in the business,” Cohen said, “we’re still scratching the surface in terms of the total addressable market. We want to be No. 1. We’re No. 1 online. We want to be the largest pet retailer in the world.”

That’s an admirable goal, but Chewy might need to diversify its sales approach to attain it, advised Steve Kirn, a lecturer in retail management at the University of Florida’s Warrington College of Business. Kirn pointed out that brick-and-mortar companies such as Petco and PetSmart dominate the field with more than half the overall market, even though their online presence is minimal, with 3.1 percent for Petco.com and 2.2 percent for Petsmart.com.

“The people who are going to be winners are the omnichannel or multichannel people who can satisfy you in a store, online, mobile, maybe even with a mail-order catalog,” Kirn said, explaining that brick-and-mortar stores offer services that online stores cannot match, such as grooming and training. There’s also the social aspect of shopping. Kirn even lets his border collie, Myka, partake of the experience.

“When we go to the pet store, our dog really likes to go along with us, and she sniffs around at all the toys and maybe she’ll land on one that she really likes,” he said. “We give her a little bit of a role in picking it out. This dog is a border collie, and she has a very clear point of view about things. We’ve ordered some things online, but generally we’ll go to PetSmart or Petco.”

While online sales are increasing as much as 20 percent per year, depending upon the category, as much as 90 percent of all purchases are still made in brick and mortar stores, Kirn said.

Cohen recognizes that Chewy.com needs to expand to provide his customers with fast and efficient service.

A network of warehouses in key parts of the country will enable the company to reduce both transport costs and delivery time. The company currently provides overnight delivery for more than 60 percent of its customers. The goal, he said, is to increase that to 80 percent by early next year.

Delivery, which is currently handled by FedEx ground, could prove an expensive proposition, especially to provide for those living in far-flung places, including one remote Texas town that a customer described as, “Honey, I live so far out in the woods there’s not even a Chipotle.”

Kirn asked, “Do the economies of doing this home delivery work out? It tends to work out in densely populated areas because it’s more efficient. You don’t have to go driving all over creation to deliver stuff. Places like New York or Chicago or Miami have the kind of population density where I think it can work out. But if you truly want to be a national service, delivering to everyone, you’ve got a problem.”

Cohen is aware of the many stumbling blocks strewn in the way of his dream. To date, the company has yet to register a profit, using investor money to support the increase in staff and capital improvements. The company currently serves more than 2 million customers nationwide, with the highest concentration of customers in the densest populations such as California and New York. His team is constantly scaling the business model to generate revenues that exceed costs.

Chewy is also following the model of superior customer service pioneered by online retailer Zappos. Chewy set a goal of answering the phone within five seconds — and with a live person who is knowledgeable about the entire line of products the company offers its customers.

“From the beginning,” Cohen said, “we came in saying that we want to provide pet parents with the most amazing customer experience. Period.” His aim is to build a bond based on trust, where customers recognize that Chewy personnel know their products and are not looking so much to make a sale as to satisfy the needs of the customer. “Being able to establish that trust is an amazing thing, because pet parents, like myself, are very vocal, and if we could do a good job at building that trust, then they will stay loyal.”

Those handling customer calls are encouraged to get creative in their efforts to awe the customer.

“The goal is with every interaction there’s a ‘wow’ experience,” said Kelli Durkin, vice president of customer service. “So, that customer should hang up the phone and go, ‘Did that really just happen?’”

Durkin wanted to send a burrito to the Texan who lived outside the orbit of a Chipotle. Instead, she sent a gift card for the restaurant, with a note that said, “Next time you’re in the big city, get yourself a burrito on Chewy.”

“He loved it, “ Durkin said, “and I’m sure he’s still a customer.”

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Getting into ‘the cloud game’ without high overhead

 

When an enterprise or a startup wants to build a cost-effective infrastructure and take advantage of the benefits of scale that the cloud provides, there are a number of factors to consider. The total cost of ownership will surprise you if you do not build correctly for scale and elasticity, according to Pedram Abrari (pictured), chief technology officer of Pramata Corp.

“People will be shocked by the kinds of bills they can receive from cloud vendors if they don’t manage and contain their problem effectively,” Abrari said.

He spoke with John Furrier (@furrier), host of theCUBE, SiliconANGLE Media’s mobile live streaming studio, at SiliconANGLE’s Palo Alto, California studio to break down the news from the Google Cloud NEXT event.

Abrari and Furrier talked about how cloud computing has created a new paradigm for businesses of all sizes to “get in the game” without high overhead.

Tradeoffs and the real total cost of ownership

 

The stakes have changed for high-tech startups, with the emergence of Infrastructure as a Service and the virtualization of hardware. Startups require upfront capital and investments in technology, and before Amazon Web Services rolled out its IaaS platform, the total cost of ownership and upgrades every two to three years made starting a business difficult, Abrari explained.

“So, before you could even focus on your core competency, there were all these layers of investment and the talent you had to attract just to get cloud software up and running. Cloud computing, particularly with IaaS, changed that game … and it allowed a lot more companies to have access and the ability to get into the game that previously couldn’t,” Abrari said.

The roles of DevOps, IT and operations have morphed over the years, and Abrari explained that the evolution of the cloud has created the need for DevOps teams to create additional “plumbing” for IaaS to keep things scalable, cost efficient and elastic.

“You have to rethink DevOps [as a] culture of developer and operations all working in concert, always designing software for scale in the cloud. It’s a very different paradigm. … If you think you have a service that you can throw on the cloud and magically get the benefits and costs get lowered, I’m here to tell you that if you don’t play your cards right, it can all blow up in your face very quickly,” he said.

As with all technology platforms, there are trade-offs, and according to Abrari, multi-cloud and cloud neutrality can come with a high price tag. He discussed the complexities of AWS and noted that the company’s billing department is a whole economy.

As a serial entrepreneur involved in a number of startups, he recommended that the focus should be on core IP and core differentiation. Platform as a Service is a way to pay attention to the business, but a company will end up giving up some control to AWS, Google or Azure; however, there are options to find the right fit for the business, Abrari explained.

“Give up control for productivity and cost reduction and you also gain from all the expertise and best practices they developed around security, audit … and you take care of your customer data and don’t expose them to risk,” Abrari advised.

Pramata Corp. works with clients like NCR and Hewlett Packard Enterprises to refine and transform messy contract data and disparate billing and CRM systems into a single, actionable source of customer intelligence. Machine learning and artificial intelligence are the company’s secret sauce to helping customers save money and make better business decisions, Abrari revealed.

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2017 HW Tech100 Winner: LoanLogics

 

LoanLogics provides solutions to lenders, servicers, insurers, and investors that want to improve the loan quality, performance, and reliability during the loan lifecycle.

The LoanHD Loan Quality Management platform provides real-time, highly automated mortgage quality control, reducing costs and potentially doubling productivity when compared to manual internal audits or other third party audit services.

Another offering, the LoanHD Loan Performance Management platform, is an intuitive loan portfolio management tool that aggregates data services and analytic models to gauge and monitor portfolio performance, including analyzing borrower credit and collateral health.

LoanHD incorporates dashboards and visual data displays to assess exposure to risk or surface opportunity, starting at the portfolio level with access to loan-level details.

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Prosper Marketplace Closes Loan Purchase Agreement for up to $5 Billion of Loans with Consortium of Institutional Investors

SAN FRANCISCO--(BUSINESS WIRE)--Prosper Marketplace, a leading online consumer lending marketplace, today announced that it has closed a deal with a consortium of institutional investors to purchase up to $5 billion worth of loans through the Prosper platform over the next 24 months. The investors in the consortium are affiliates of each of New Residential Investment Corp., Jefferies Group LLC and Third Point LLC, and an entity of which Soros Fund Management LLC serves as principal investment manager. The consortium will also earn an equity stake in the company based on the amount of loans purchased, further aligning the group with Prosper’s future growth and success. Warehouse financing of up to $1 billion will be provided by a syndicate of lenders including Credit Suisse, Deutsche Bank, Goldman Sachs and Morgan Stanley.

“We’re very pleased to be working with this consortium of investors, and believe they will be great long-term partners as we continue to build a large-scale business,” said David Kimball, CEO, Prosper Marketplace. “This deal gives us the funding stability and additional capital markets expertise we need to continue to grow our marketplace and achieve profitability in 2017.”

Prosper has maintained positive momentum since the second half of 2016, with monthly loan originations growing steadily since July. In addition, the Prosper loan portfolio is delivering solid returns to its institutional and individual investors, with an estimated net return of 7.86%1 for January 2017. Prosper continues to diversify its investor base, and is focused on bringing new banks and other institutional investors onto the platform.

Financial Technology Partners (FT Partners) served as strategic advisor to Prosper Marketplace and its Board of Directors on this transaction. DV01 will be the loan data agent to the consortium.

About Prosper Marketplace

Prosper’s mission is to advance financial well-being. The company’s online lending platform connects people who want to borrow money with individuals and institutions that want to invest in consumer credit. Borrowers get access to affordable fixed-rate, fixed-term personal loans, and investors have the opportunity to earn attractive returns via a data-driven underwriting model. To date, over $8 billion in personal loans have been originated through the Prosper platform for debt consolidation and large purchases such as home improvement projects, medical expenses and special occasions.

Prosper launched in 2006 and is headquartered in San Francisco. The lending platform is owned by Prosper Funding LLC, a subsidiary of Prosper Marketplace. Loans originated through the Prosper marketplace are made by WebBank, member FDIC. Visit www.prosper.com and follow @Prosperloans to learn more. Prosper notes offered by Prospectus.

1 Estimated return on January 2017 production is 7.86% according to the Prosper Performance Update: January 2017

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Pet food retailer Chewy.com has seen fantastic growth. But can it keep up the pace?

 

The leading online purveyor of pet food and supplies almost never was. That’s because the founders of Broward-based Chewy.com originally planned to go into the online jewelry business.

“We had actually bought jewelry inventory, and we were literally days away from launching the website,” says Ryan Cohen, Chewy’s 31-year-old chief executive officer. “We bought about $150,000 worth of jewelry. So we were that close to starting to sell jewelry.”

Cohen and Michael “Blake” Day, who met in an online chat room about computer programming, had pooled their money for the jewelry venture. They decided to sell everything at 80 to 90 cents on the dollar after Cohen convinced his business partner that pets had better market potential. Cohen came to that realization while shopping for his toy poodle, Tylee.

“I always wanted to do something with pets, but I couldn’t figure out how to monetize it,” he said. “So I was going to the pet store and realized the market online was really under-penetrated. I said, ‘This jewelry idea, we’re not passionate about what we’re doing. This is a much better opportunity.’ I understand the customer — because it’s myself. So we built the company.”

Cohen and Day redirected their finances and co-founded the company. Neither holds a college degree, and at the start they lacked a business plan. But they had faith in their abilities, both having extensive experience with computers since their teens, Cohen said. They launched the company in 2011, along with Alan Attal, one of Cohen’s childhood friends from Montreal.

The privately-held company registered $26 million in sales during its first full year in business. Chewy has since grown to 3,700 employees and is projected to increase revenues to nearly $2 billion this year — nearly a 7,600 percent growth spurt in just six years.

According to 1010Data, Chewy.com rules the online sales of pet food, with nearly 51 percent of the online market, including 40.5 percent in direct sales and 10.2 percent in subscription sales. The nearest competitor isn’t even close. Amazon.com cornered nearly 35 percent of the market, with 23.5 percent in direct sales, 7.6 percent in subscriptions and 3.6 percent at retail. By comparison, Walmart.com has less than 1 percent of the online market share.

Cohen has aggressively pursued the No. 1 position for online sales, but what he really wants is more of the overall market for pet food and supplies. According to the American Pet Products Association, pet owners in the United States spent an estimated $62.75 billion on their animals last year, with $24.01 billion on food and $14.98 billion in supplies and over-the-counter medicine, making their target market roughly $40 billion. At $2 billion in sales, Chewy would command roughly 5 percent of the market.

“So if you look at where we are today in the business,” Cohen said, “we’re still scratching the surface in terms of the total addressable market. We want to be No. 1. We’re No. 1 online. We want to be the largest pet retailer in the world.”

That’s an admirable goal, but Chewy might need to diversify its sales approach to attain it, advised Steve Kirn, a lecturer in retail management at the University of Florida’s Warrington College of Business. Kirn pointed out that brick-and-mortar companies such as Petco and PetSmart dominate the field with more than half the overall market, even though their online presence is minimal, with 3.1 percent for Petco.com and 2.2 percent for Petsmart.com, respectively.

“The people who are going to be winners are the omni-channel or multi-channel people who can satisfy you in a store, online, mobile, maybe even with a mail-order catalog,” Kirn said, explaining that brick-and-mortar stores offer services that online stores cannot match, such as grooming and training. There’s also the social aspect of shopping. Kirn even lets his border collie, Myka, partake of the experience.

“When we go to the pet store, our dog really likes to go along with us, and she sniffs around at all the toys and maybe she’ll land on one that she really likes,” he said. “We give her a little bit of a role in picking it out. This dog is a border collie, and she has a very clear point of view about things. We’ve ordered some things online, but generally we’ll go to PetSmart or Petco.”

Online shopping is a convenience, but the majority of sales still take place in the stores, he pointed out. While online sales are increasing as much as 20 percent per year, depending upon the category, as much as 90 percent of all purchases are still made in bricks and mortar stores, Kirn said. He also pointed out the inherent risks of growing too big too quickly.

“It’s very hard to sustain over time this type of frenetic growth,” he said. Others have tried and failed, he cautioned. Case in point is Pets.com, which famously featured a sock puppet singing off-key to K.C. and the Sunshine Band’s “Please Don’t Go.” The TV ad aired during the 2000 Super Bowl and drove home the point that people could spend more time with their pets if they ordered their supplies online. The company went out of business in November 2000, just 268 days after going public.

Chewy has at least one advantage over Pets.com: It saves on production costs by producing all its commercials and You Tube videos in-house.

When asked about the biggest potential pitfall Chewy faces, Kirn narrowed it down to money. “Making money,” he said. “Expanding so fast and acquiring debt, even with the sales that they have, they probably are not generating enough to support all the infrastructure for the business that they have to do. So, they’re going to be borrowing money. So, their borrowing costs will go up. And that’s why they’ll have to grow the business really fast, to be able to meet their obligations on their notes.”

Cohen recognizes that the company needs to grow to provide his customers with fast and efficient service. Before the company ramped up by first renting, and then purchasing warehouses for distribution, Cohen says the company hired another company to handle that side of the business. Now Chewy is making the capital investment to ultimately reduce that cost by doing everything in-house. A network of warehouses in key parts of the country will enable the company to reduce both transport costs and delivery time. The company currently provides overnight delivery for more than 60 percent of its customers. The goal, he said, is to increase that to 80 percent by early next year.

Delivery, which is currently handled by FedEx ground, could prove an expensive proposition, especially to provide for those living in far-flung places, including one remote Texas town that a customer described as, “Honey, I live so far out in the woods there’s not even a Chipotle.” Kirn asked, “Do the economies of doing this home delivery work out? It tends to work out in densely populated areas because it’s more efficient. You don’t have to go driving all over creation to deliver stuff. Places like New York or Chicago or Miami have the kind of population density where I think it can work out. But if you truly want to be a national service, delivering to everyone, you’ve got a problem.”

Cohen is aware of the many stumbling blocks strewn in the way of his dream. To date, the company has yet to register a profit, using investor money to support the increase in staff and capital improvements. The company currently serves more than 2 million customers nationwide, with the highest concentration of customers in the densest populations such as California and New York. His team is constantly scaling the business model to generate revenues that exceed costs.

“It is a business where the barriers to entry are relatively low, but in order to be successful, the execution is really more difficult and complex,” Cohen acknowledged. “Anyone can go and build a Walmart, but it’s hard to do. It can be done. The blueprint is there, but it’s hard to actually execute and to get to that scale to be as successful as they are.”

It’s difficult to sustain, let alone grow, Kirn said. “Walmart did about half a trillion dollars in sales last year,” he said. “So, if they wanted to grow the business by 5 percent in one year, they would have to grow by $25 billion. They would have to grow by a company the size of Macy’s just to get a 5 percent growth.”

Chewy has grown so rapidly that it needed several infusions of cash to support its infrastructure. Investors appear willing to assist. The company supplied a list: Volition CapitalT. Rowe Price New Horizons FundBlackRockAllen & Co., VerlinvestGreenspring and Mark Vadon.

“We’ve raised five rounds of financing — $236 million over five different rounds from five different investors — between 2013 and now,” Cohen said. “In the beginning, it was difficult to raise, but as we’ve scaled, we have a track record of success. It’s made it easier, and today it’s much easier to finance the business than when we were a lot smaller.”

On Feb. 1, Wells Fargo Capital Finance became the latest investor, announcing an agreement to lend $90 million over the next five years to Chewy, Inc. The loan will assist the company as it continues its expansion.

Chewy currently operates three distribution centers — including a 567,000-square-foot warehouse in Reno and two similar-sized facilities, one just outside of Hershey, Pennsylvania, and the other in Indiana. By this time next year, Cohen says, his company plans to have doubled its distribution centers. Plans call for opening a warehouse in Dallas and another in northeastern Pennsylvania this year. In February 2018, the firm is also opening a 611,000-square-foot warehouse in Ocala.

That’s roughly four hours from Chewy’s headquarters in Dania Beach. Cohen calls himself a snowbird who fled the Canadian winters for Florida, where he has family. He established Chewy in the office complex that houses the Design Center of the Americas. Designers looking for the latest in luxury furnishings may do a double-take as members of the Chewy staff stroll in with their pets in tow. Aside from the usual complement of cats and dogs, the Chewy pet family includes the occasional ferret, parrot, lizard, snake and sugar glider (which resembles a flying squirrel with a striped face and big brown eyes). Samantha Rassner even brings her wolf to work. Known simply as The Wolf, the cream-colored tundra wolf with a mohawk, is so gentle that he even lets strangers pet him.

Rassner, the company’s vice president of software development, credits The Wolf with landing her a job at Chewy. Before joining Chewy some 16 months ago, Rassner said, she ran a local startup focused on home and marine automation. While looking for additional talent at a tech meet-up, she met the Chewy recruiters, who also were looking to hire. “I walked up and was like, I love you guys; I just wanted to talk to you and to say thank you for everything that you do,” she said. “I’m a huge customer, a huge fan.” The Wolf was with her and so they started talking about him and how she rescued him and nursed him back to health after his original owner had left him for dead, tied to a stake in an open field. That chance encounter led to a job interview with the three friends who were with the company from the start: CEO Cohen, Chief Technology Officer Day, and Chief Operating Officer Attal.

“It was definitely key, that meant-to-be match,” Rassner said. “When I went in the next day I didn’t bring The Wolf with me, but I was talking with Alan and Ryan and Blake and told them all about The Wolf and they were, ‘Bring him in. Why didn’t you bring him?’ So, there was never a question of if I could bring him in. It was just how soon I could get him in there.”

Rassner said she joined Chewy with the express mandate to turn the company into a full-fledged software development company. Under her watch, she estimates the department has more than quadrupled in size, with some 50 software developers that oversee warehouse management, e-commerce and mobile apps.

In January, the team expanded into Boston, where Chewy leased a 20,000-square-foot space for software developers, designers and recruiters. Boston is also home to one of Chewy’s earliest backers, Volition Capital, which reportedly pumped $15 million into the company in late 2013.

Larry Cheng, managing partner at Volition, sits on Chewy’s board of directors, as do Mark Vadon and Kevin Hofmann. Vadon, one of Forbes’ newest-named billionaires, is an online retailing guru who is a founder of online retailers Blue Nile and Zulily. Hofmann serves as chief marketing officer for Home Depot and president of its online business. Building on the success of other company models, Cohen said, “We’ve hired folks from many different companies, including Petsmart, Amazon, and Whole Foods.”

Chewy is also following the model of superior customer service pioneered online retailer Zappos. Chewy set a goal of answering the phone within five seconds — and with a live person — who is knowledgeable about the entire line of products the company offers its customers.

“From the beginning,” Cohen said, “we came in saying that we want to provide pet parents with the most amazing customer experience. Period.” His aim is to build a bond based on trust, where customers recognize that Chewy personnel know their products and are not looking so much to make a sale as to satisfy the needs of the customer. “Being able to establish that trust is an amazing thing, because pet parents, like myself, are very vocal, and if we could do a good job at building that trust, then they will stay loyal.”

For Kelli Durkin, vice president of customer service, sometimes building that trust involves sending a card at Christmas or on a pet’s birthday, or even a small portrait of the family pet. Sometimes, it involves simply listening to a caller. A flat-screen monitor in the center of the call center on the third floor of the DCOTA building electronically tracks all incoming calls and their duration, with no time limit on the calls. The call center is open around the clock, and on any given day, as many as 12,000 calls come in.

Those handling the customer calls are encouraged to get creative in their efforts to awe the customer.

“The goal is with every interaction there’s a ‘wow’ experience,” Durkin said. “So, that customer should hang up the phone and go, ‘Did that really just happen?’”

Chewy surprised one customer with a computer keyboard after he called to place his order, explaining that he only did so because his keyboard was broken. Another customer, whose house had just burned down, kept talking about how the bedsheets they had just purchased for their children had burned in the fire. They were theme sheets from the Disney movie “Frozen.” The customer service operator handling the call, surprised the customer by replacing the bedsheets as a way to comfort his daughters.

Durkin wanted to send a burrito to the Texan who lived in such a remote area outside the orbit of a Chipotle. Instead, she sent a gift card for the restaurant, with a note that said, “Next time you’re in the big city, get yourself a burrito on Chewy.” “He loved it, and I’m sure he’s still a customer,” as is the 73-year-old woman who Durkin said called to say, “I just received flowers to my home because my dog passed away. This is the second time in my life that I’ve ever received flowers, and I need to thank someone.”

It’s that kind of interaction with his customers that Cohen seeks. His goal is to build a company that is intimate enough to cherish its individual customers and large enough to make a profit while saturating the market. “We wanted to create a business that could be a household name,” he said, and he’s well on his way.

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