Just as we headed into the weekend, day before yesterday, the anticipated news broke that formally identified the Minnesota firm that’s funding local ecommerce technology startup Alvenda. I had been picking up rumblings of hiring in the suite of offices at 12th and Marquette that Alvenda shares with two other tech firms. I guess we can now stop bitching about how Minnesota’s Internet and software startups never get any love from the VCs, huh? At least from our local VCs — because Eden Prairie-based Split Rock Partners was named as one of the investors, and I would assume led the round. The story first broke Friday afternoon locally in our weekly Business Journal, as a result of the SEC filing. Split Rock has been quite active as of late. According to its news page (where the Alvenda announcement does not appear as of this writing), this would be the firm’s third funding announcement so far in January, two of which are for Minnesota companies.
I actually picked up the “who and how much” news tip on this story at the Social Media Club workshop Friday morning at Best Buy, from a deep-throat source I shall not name… 🙂 And I decided to post it after we recorded our latest Minnov8 Gang podcast yesterday — in which, among other things, I chatted about this news with our guest, George Reese, CTO of enStratus, which shares offices with Alvenda. (And Alvenda also uses enStratus’ cloud computing management tools.) You may recall that Alvenda won the 2009 MN Cup business plan competition this past September — which was no small feat with more than 1100 entries. The firm was only founded in 2008, and had announced initial funding in December 2008 (see its news page), from private investors it did not identify. Two of its three founders hail, respectively, from retail powerhouses Retek (acquired by Oracle) and Target.com
What really launched Alvenda’s fortunes was the news this past summer that “social commerce” was coming to Facebook by way of 1-800-Flowers setting up the first online store there — with Alvenda’s technology behind it. Coverage of that development ensued on TechCrunch and in BusinessWeek, the Financial Times (registration required), and elsewhere, giving Alvenda quite a sudden high profile, the likes of which a Minnesota startup hasn’t seen in some time. And that buzz certainly boosted the firm’s chances in the MN Cup judging that followed soon after.
Here’s a backgrounder page on Alvenda, which includes this quote from Wade Gerten, CEO, which I think captures the essence of what this breakout Minnesota startup is all about:
“We believe the majority of future online sales will happen offsite. Customers will be able to shop with brands wherever they happen to be whether they’re on YouTube, a favorite blogger Web site, or in Facebook. With innovative merchants like 1-800-Flowers, Alvenda is moving commerce forward to these touch points and is generating remarkable sales results.”
But the aforementioned flower store on Facebook is just the beginning of putting “shops next-door to the conversation,” as BusinessWeek so aptly puts it. The FT.com story cited above, from August 2009, said at the time that “at least 20 more such storefronts will appear on Facebook in the next two months,” quoting Alvenda’s Gerten. The story said Gerten claimed contracts at the time to develop eight such storefronts, and that, since the 1-800-Flowers application launched, Alvenda had secured 12 more. So, you can understand why there’s a flurry of activity at the firm these days. FT.com quoted Gerten as saying the contracts were with “very large general merchandise retailers, and very large electronics retailers.”
Oh, I wonder whom that might include…