Venda, one of the UK’s pioneering e-commerce platforms, was bought by Netsuite in July. Customers include Wilkinsons, Laura Ashley and TK Maxx. Founded in 2001, Venda made cumulative pre-tax losses of £53m in its life as an independent company from revenues of £92m yet still managed to pay out a total of £6m in directors emoluments (source: Duedil). Remarkable. Netsuite revealed that they paid just $50m for the business. This is way below the valuation of £170m which the press were discussing in 2013, just before Dan Wagner, Venda’s flamboyent founder, pulled its flotation.
The £170m price tag itself was based on a comparsion with Demandware – a competitor SaaS platform – which had successfully floated on a 5x sales valuation in 2012. But Venda was no Demandware and Netsuite’s probably paid only around 1.5x sales. Squeezed between Magento for simple retail e-commerce installations and by Hybris/ATG/Demandware for more complex ones, Venda’s mid-market proposition is less relevant than it once was.
By the time Netsuite bought the business, it had evidently run out of steam. “It’s safe to say Venda was not growing when we acquired them,” said Netsuite’s CEO, possibly because it “had almost non-existent sales teams.” Netsuite made it clear in July that they had bought Venda for its capabilities and people; not for the business.
Fast forward to November 2014 and Netsuite made no mention at all of Venda in their Q3 results.
Since then, things have been quiet other than a snippy comment from client Bonmarche in its annual results. Bonmarche blamed the acquisition for delays in implementing responsive design on its website. The Venda brand may not be important to Netsuite but its roster of high profile retail clients will make trouble if they’re not properly looked after.