Poole-based Amazon competitor OnBuy is on the hunt for more resellers to add to its platform after receiving £3m in private equity (PE) investment, CEO Cas Paton told CRN.
OnBuy was originally launched in 2013 but was taken down in 2014 after a disagreement between its shareholders, which led to Paton taking control of it in a management buyout and relaunching it in 2016.
Around 85 per cent of its sales are consumer but the chief exec said that it concentrates on services to B2B, rather than sales.
Paton said that OnBuy works with a number of distributors who use the platform as a way to engage with B2C audiences that they wouldn't usually work with, but he is looking for more distributors to start using the online market and hopes that word of mouth among disties will work its way to resellers selling on the site.
"All the distributor would need to see some benefit from OnBuy's growth would be to introduce their resellers to us so the resellers can buy from the distributor and sell through us," he explained.
"This affects the whole reseller market because we give a brand new route to market that is dominated by large internet marketplaces like Amazon and we're creating new opportunity.
"That benefits distributors because we open the door for more of their resellers to join OnBuy. It's simply a case of educating their resellers about OnBuy, and the distributor will get the indirect benefit of that sale."
Paton emphasised that the platform is just another means to market for distributors and does not take away from the distie's relationship with their resellers.
"They still continue to sell to their resellers; they're just pushing their resellers to join OnBuy which enables us to sell more volume and they're selling more volume to their resellers," he added.
"A lot of the distributors and brands we work with appreciate that; they want that additional volume, so they push that reseller towards us. That's an indirect benefit because the reseller sells more, buys more from the distribution company and everybody wins."
The £3m investment from London-based PE firm Fuel Ventures allows the company to expand its operations into 20 countries by the end of the year, including the US, UAE, Australia and Canada. This would mark its first time entering different markets as it has been UK-only until now.
The investment will also see the company double its headcount to 34 in the next six months, and Paton said the firm is scoping out a potential office in the North of England, most likely in Manchester.
Paton said that OnBuy's current growth market share (GMV) sits at roughly £30m, but he has ambitions to raise this figure to £1bn by 2024. He added that it is adding 300 retailers per month to the platform and currently has 21 million products on the site.
"Our current GMV sits at around £30m and that is climbing very quickly. We're growing five times year on year, January is already five times the previous January, February is already on track to be five times the previous February," he said.
"The injection from Fuel Ventures enables us to focus more aggressively on growth. To date we've been very much throttled by cashflow and this is the first time we've been able to receive funds from a VC rather than angels, which often comes in drips and drops.
"We're in a much stronger position to invest and grow and remove those throttles that we have in place that hinder our overall growth. We're all very excited about what we can achieve once we stop limiting our exposure to those throttles."
Mark Pearson, founder of Fuel Ventures, added: "As a fund of entrepreneurs for entrepreneurs, we have extensive experience in the e-commerce industry and only invest in companies that we feel have extraordinary potential for growth and scale, so investing in OnBuy was an obvious choice for Fuel Ventures.
"It's a marketplace that values the seller just as much as the customer, which gives it a real USP as that has been historically overlooked by competitors.
"After seeing the company's impressive growth to date, it's apparent that OnBuy is destined to become a global player in the e-commerce marketplace world. We're thrilled to be a part of this journey and can't wait to share OnBuy's great achievements over the next few years."
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