It’s IPO day at ChannelAdvisor.

The Morrisville-based provider of ecommerce services anticipates going public today on the NYSE, setting a price of $14 per share on 5.75 million shares with a target of $80 million.

Late Wednesday, ChannelAdvisor disclosed that it had priced the shares.

The company expects to net $71 million after expenses from the IPO or some $82.2 million if the underwriters of the offering excerise options to purchase more than 860,000 shares. 

Trading is scheduled to begin today on the NYSE under the symbol ECOM.

The company itself is offering all the shares, ChannelAdvisor said in a statement.

In April, ChannelAdvisor had said it hoped to raise as much as $86 million.

In preparing for the offering, ChannelAdvisor executed a reverse 1-to-16 stock split on May 9. 

Underwriters have the option to purchase another 862,500 shares at the IPO price over the next 30 days.

Revenues Up But Losses Continue

Through March 31 of this year, ChannelAdvisor disclosed revenues of $14.9 million, up from $12.2 million a year ago. However, losses also increased, climbing to $2.7 million from $827,000.

Over each of the last three years, ChannelAdvisor has grown its revenues but continued to incur losses:

  • 2010: $37 million in revenue; $4.6 million loss
  • 2011: $44 million in revenue, $3.8 million loss
  • 2012: $54 million in revenue; $5 million loss

The shares being offered represent some 39 percent of ChannelAdvisor’s common stock, the company said in a filing. That percentage would be reduced if the underwriters exercise their options. 

Over the next several months, the owners of the remaining shares can choose to sell them.

Following the IPO, the remaining 14.7 million shares “will be available for sale in the public market beginning 180 days after the date of this prospectus following the expiration of lock-up agreements between some of our stockholders and the underwriters,” ChannelAdvisor said in the filing. “The representatives of the underwriters may release these stockholders from their lock-up agreements with the underwriters at any time and without notice, which would allow for earlier sales of shares in the public market.”

Goldman, Sachs as well as Stifel, Pacific Crest Securities, BMO Capital Markets, Needham & Company, and Raymond James & Associates are handling the offering. 

Growth Plans

In the latest SEC filing, ChannelAdvisor spelled out its growth strategy:

  • Expanding our sales force to acquire new customers. We intend to increase our sales force in order to reach and acquire new customers in existing and new geographies. By increasing investment in our sales and marketing capabilities, we believe that we will be able to further expand our brand among new potential customers, grow our revenue and achieve greater economies of scale.
  • Broadening and deepening existing customer relationships. We intend to expand our sales, marketing and services efforts to help our customers increase their overall GMV [gross market value] processed through our platform by taking full advantage of the functionality of our suite of solutions. As our customer service team works with our customers to optimize usage of their existing modules, our customers’ online businesses often improve, and customers look to expand into additional modules within our suite of solutions.
  • Increasing our global market presence. We intend to continue our international expansion to attract new international customers and help our existing multinational customers grow their online sales. We plan to expand our existing presence in Europe and the Asia-Pacific region and to establish new operations in Latin America.
  • Expanding the number of channels supported by our platform. We intend to continue to integrate our solutions with additional channels both within the United States and abroad, such as MercadoLibre in Latin America and Alibaba in Asia. We believe that by selectively adding more channels, we will grow both our customer base and the potential GMV that customers are able to process through our platform.
  • Maintaining innovation leadership. We intend to continue to develop and introduce new features and improved functionality to our platform. Key initiatives include developing increased workflow automation, enhanced data analytics and expanded foreign language support.
  • Opportunistically pursuing strategic acquisitions. We may pursue acquisitions of complementary businesses and technologies that are consistent with our overall growth strategy. We believe that a selective acquisition strategy could enable us to enhance our product capabilities, gain new customers and accelerate our expansion into new markets.

Its Customer Base

ChannelAdvisor operates globally, but as of March 31 it noted that 74 percent of its customers are based in the U.S.

“As of March 31, 2013, we had nearly 2,000 core customers worldwide, including retail and manufacturer customers across many consumer product categories, and served 27% of the Internet Retailer Top 500 based on 2012 sales,” the company said. “For the year ended December 31, 2012 and the three months ended March 31, 2013, our ten largest customers in the aggregate accounted for 7.2% and 6.7% of our total revenue, respectively. No single customer accounted for more than 2% of our total revenue in either of these periods.”

ChannelAdvisor’s customers include large businesses such as computer makers Dell and Lenovo and apparel retailers such as Jockey International and Under Armour. The company also counts as customers smaller businesses whose only retail presence is an online storefront on marketplaces such as Amazon.com or eBay.

According to an earlier filing, the company had more than 1,900 customers worldwide at the end of 2012.

The ecommerce software market does offer ChannelAdvisor some competition. Seattle-based Mercent Corp., started by Amazon veterans in 2005, provides online retailers capabilities similar to what ChannelAdvisor offers. But ChannelAdvisor boasts a global presence to keep step with growing global e-commerce. ChannelAdvisor maintains a Europe, Middle East and Africa headquarters in the United Kingdom and an Asia Pacific headquarters in Australia.

Investors include eBay and Raleigh-based Southern Capitol Ventures.

ChannelAdvisor founder and CEO Scot Wingo has successfully steered two other Morrisville companies to exit. In 1998, Wingo sold Stingray Software to Boulder, Colo. company Rogue Wave Software Inc. for $21 million.

Two years later, Wingo’s online auctions software company AuctionRover.com was acquired by Pasadena, Calif. company GoTo.com for $174 million.

The full SEC filing is available online.

(Note: Capitol Broadcasting, the corporate parent of WRALTechWire, is an investor in Southern Capitol.)

[CHANNELADVISOR ARCHIVE: Check out more than a decade of ChannelAdvisor stories as reported in WRAL Tech Wire.]