Rearden Commerce this month announced it has received an additional $100 million in funding primarily from previous investors American Express, Foundation Capital and Oak Investment Partners and new investor JPMorgan Chase, which is working with Rearden to develop a new Web-based customer loyalty platform for the Chase consumer credit card division.
Rearden will use about 80 percent of the working capital for research and development, including increasing its workforce from more than 300 to 500 employees over the next year. It also will open the Rearden Personal Assistant platform to include a business-to-consumer offering that will bring more third-party suppliers into the system, generate revenues from advertising and increase its distribution network with customized offerings for the consumer and small business market. However, Rearden chairman and CEO Patrick Grady said the company's foremost focus remains on the business-to-business platform.
Part of the R&D budget will be used to expand its offering outside of North America and add three or four business travel-dedicated employees. Sources said the Rearden-based online procurement platform American Express Intelligent Online Marketplace is planning a U.K. rollout for later this year.
The newest investment amounts and ownership stakes have not been disclosed, but Grady said all parties are minority investors. In 2006, Amex paid $22.5 million for an equity stake in Foster City, Calif.-based Rearden during a previous round of corporate and venture capital funding
(BTNonline, Dec. 4, 2006). "This was the smallest round that we could raise to accommodate everyone's ownership interests and minimize dilution for Rearden," he said. "We could have raised $200 million or more. I'm relatively dilution-sensitive. I don't want to own less of the company than I do today."
The $100 million doubles the overall investment in Rearden, and it also shows an increased interest from public and private investment firms, despite Grady's acknowledgement that Rearden has been unprofitable thus far. However, he claimed the company has grown revenues and market capital valuation by more than 700 percent over the last two years.
Grady's focus is not working toward an initial public offering, but rather funneling investment into product development, but he did say "an IPO is always an option. The company will go public when it makes sense for its shareholders and for new shareholders. We have quite an abundance of demand from public and private investors to execute a public offering for us. We are just not in a great hurry," he said. "There is no shortage of people who would like to take us public and or who would like to buy us. We're just very focused on building the business right now."