December 1, 2008, 12:00 AM

BX.com secures $25 million to buy distressed e-commerce tech vendors

BX.com, a 15-year-old technology company, says it is primarily interested in acquiring the clients of online retail technology vendors in financial difficulty. The aim is to migrate those clients onto BX.com`s pureCommerce platform.

BX.com, a 15-year-old technology company, has received $25 million in funding to purchase the client lists of online retailing technology vendors. It is hoping to migrate clients of other e-commerce platforms onto its pureCommerce platform. In particular, it expects to attract software-as-a-service clients to its licensed model, president Mark Shapiro tells Internet Retailer.

At the same time, BX wants to assist financially struggling e-commerce technology companies, before or after they file for bankruptcy, who want to discontinue their services to clients. “We will purchase their client base and create a clear migration path to ensure that their e-commerce clients do not experience any downtime,” Shapiro says.

BX built its platform to run primarily in a Microsoft technology environment, but it is also employs Java technology that supports its integration with any platform, Shapiro says. BX also provides order management and inventory management as part of its e-commerce platform, he adds.

BX has not publicized the names of its financial backers, which include an individual financier based in the U.S. and two European venture capital firms, Shapiro says. BX may eventually seek an additional $25 million to fund acquisitions, he adds.

Bernardine Wu, CEO of FitForCommerce, a consulting firm that helps retailers select e-commerce technology vendors, says BX has been increasing its presence among retailers looking for e-commerce technology. "We have seen the pureCommerce platform on the long list of a number of vendor selection processes that we manage on behalf of online retailers, so BX appears to be increasing its position in the marketplace," she says.

Nikki Baird, managing director of research and consulting firm Retail Systems Research LLC, said she was unfamiliar with BX but that its strategy supports an unmet need in the e-commerce technology market. “There are still far too many small players out there in a very fragmented market, so it’s about time someone started a consolidation move,” she says. “The big platform guys have made acquisitions here and there, but there are still far more shopping cart technologies out there, for example, than one would think the market could support.”

Adds Wu: "It`s not surprising that BX or any other e-commerce platform provider is seeking to acquire other e-commerce software companies as this market has becoming increasingly competitive and flooded with options. The key, of course, is to ensure that the acquired components or client bases can make a smooth transition so clients are not instead triggered to look elsewhere."

BX.com’s existing clients come from several industries, including retailing, financial services, education, health care and professional services. It lists among its retailer clients Luggageguy.com, iRobot.com, Cleanrest.com and the RDStore.com e-commerce site of publisher Reader’s Digest.

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