ChannelAdvisor expands e-commerce suite with acquisition of rich-media firm

Morrisville, N.C. — ChannelAdvisor, a provider of tools and solutions to help retailers sell more merchandise and services online, is expanding its tool suite with so-called “rich media” tools.

The Morrisville-based firm is acquiring RichFX, a New York-based company that offers a hosted solution for multimedia applications. Firms ranging from Brooks Brothers to Wal-Mart use RichFX tools as part of a strategy to increase online sales.

Financial terms weren’t disclosed. The deal adds some 40 employees to ChannelAdvisor, pushing its total employee count past 340. The firm has now made four acquisitions.

RichFX filed for bankruptcy earlier this year and ChannelAdvisor acquired the firm for some $3.1 million, according to various web reports. RichFX had raised more than $50 million in venture capital and at one time employed 130 people. The company launched in 1998.

The deal is the first for ChannelAdvisor in the rich media space, augmenting offerings such as comparison shopping and search.

“Our customers are retailers, and we help drive traffic to their sites with paid search, comparison shopping and other tools,” said ChannelAdvisor Chief Executive Officer Scot Wingo. “One challenge is to convert those browsers to buyers.

“RichFX has some great technology for improving those conversion rates. They do that through better merchandising. For example, you can zoom in on shoes, look at the buckle, turn the shoe around, look underneath.”

ChannelAdvisor also had two other major reasons for making the deal, he added.

“In addition to the technology, we are also getting a nice set of customers,” he explained. “They are very loyal.

“We also are getting some smart people, people who understand the retail world. So we get technology, customers and people – that’s the whole package for us.”

RichFX tools enable customers to manage and execute changes in catalogs and online markets more quickly. The rich media tools also help customers improve the percentage of site visits that turn into sales, according to ChannelAdvisor. Tools include applications for images, conversion of a print catalog to an interactive online marketplace and an online solution for print advertising circulars.

Customers can offer zoom capabilities of images as well as alternative views, rotation and color changes.

Forty-five of the RichFX customers are part of the Internet 500 retailer list.

As part of the deal, RichFX CEO Eoin Townsend will join ChannelAdvisor as general manager for the RichFX business unit.

The RichFX deal is the second acquisition by ChannelAdvisor over the past 11 months, Last September, ChannelAdvisor acquired Marketworks, a provider of marketplace management software and services.

ChannelAdvisor closed on $30 million in venture capital in May of last year and has since then added several new partners as well as products.