January 13, 2014, 3:25 PM

Volusion borrows $35 million to expand and hire

The e-commerce platform provider says the debt, rather than venture capital financing, will help it to retain value for investors as it moves towards an initial public offering of stock. Volusion has also launched an e-commerce platform called Mozu for mid-sized and larger clients.

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E-commerce technology provider Volusion Inc. has borrowed $35 million to expand its e-commerce platform and services, including hiring personnel across the organization, it announced today. The company chose to take on debt from Silicon Valley Bank rather than to trade equity for venture capital financing so that stockholders and employees would own a bigger share of the company when Volusion goes public, it says. A spokesman for the company says its IPO could take place in 2015.

Volusion also says it has launched an e-commerce platform for mid-sized and larger e-retailers to manage orders and inventory across the web, mobile and in stores. Called Mozu, the technology is deployed in what’s known as a multi-tenant software-as-a-service model. That means retailers do not host the software on their own servers, nor must they manage software updates on their own. Instead, Volusion hosts the software on its servers and all Volusion clients run the most up-to-date version of the software at all times, with the vendor rolling out new features or bug fixes to everyone simultaneously.

Mozu offers responsive web design, in which the layout of an e-commerce site automatically adjusts to fit the size of the shopper’s screen, whether that’s a smartphone or a desktop monitor. The platform also provides software development kits based on open-source technology, which makes software code available to developers for more flexibility in customizing web pages and site features and functionality, Volusion says.

“[Mozu] will provide more options, screens and allow for more devices—and this means more customers,” says Steve Acree, owner of online speakers store Seismic Audio and a new Mozu client. “Moving to Mozu will give us the flexibility to create a greater number of diverse opportunities and a larger number of niche sites so we can truly pinpoint our customers’ needs and interests.”

Mozu, which Volusion first said was on the way in September, debuted today at the National Retail Federation’s annual convention taking place through Wednesday in New York City. The platform is priced based on a retailer’s technology use, Volusion says, declining to explain by which metrics it measures use or to give an estimate of those costs. Typically use can refer to the number of products, log-in accounts, transactions or data storage a retailer requires on a monthly basis. The company’s other, established platform, which is called Volusion and caters to smaller retailers, costs as little as $15 per month to host a basic web site and process transactions.

Volusion plans to use the new funds to update its older platform in two major ways, the company spokesman says. First, it will release what it calls a “theming engine” for retailers to create customized storefronts using responsive web design, he says. Secondly, it will launch the Volusion App Marketplace, wherein clients can purchase extensions to the Volusion e-commerce software built by other developers, he says. Volusion will also release an application programming interface, or API, that will make it easier for developers to build extensions to the Volusion platform.

“We have aggressive expansion plans in the coming years for Volusion Inc. as we continue to grow our [small-to-medium business] offering, as well as disrupt the enterprise commerce space with the Mozu platform,” says Volusion CEO Clay Olivier. “This funding enables us to reach our goals for extensive growth and to satisfy the increasing aspirations of businesses of all sizes in their quest to dominate their markets.”

Volusion says it has added more than 400 staffers and tens of thousands of clients since 2009. Two retailers in the 2013 Top 500 Guide and 11 in the 2013 Second 500 Guide report Volusion is their e-commerce platform provider.

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