E-commerce Software Company Mercent Announces Series A Financing; Massive Growth in Online Marketplace Retailing Attracts Madrona Venture Group as Lead Investor

Business Wire, Jan 19, 2005

SEATTLE -- Mercent, the single solution for online marketplace retailing, today announced Series A financing to support the growth of its flagship software product Mercent Commerce System. Madrona Venture Group led the round and funds will be used to accelerate the company's growth in select vertical markets and support the development of new product and service offerings in 2005.

"Mercent is a vital partner to retailers pursuing a multi-channel sales strategy," said Tom Alberg, Managing Director of Madrona Venture Group who will be joining Mercent's board of directors. "Mercent provides an excellent software service that helps retailers maximize sales of their products on the Internet. As a result, Mercent has gained strong adoption among key retailers."

Forrester Research estimates that online marketplace revenue more than doubled in 2004 and is expected to reach $54.3 billion by 2007, when it will account for 27% of e-commerce sales. U.S. online sales will grow from $144 billion in 2004 to more than $316 billion by 2010, reflecting a 14% compound annual growth rate and 12% of all US retail sales (source: Forrester Research studies). Mercent Commerce System enables retailers to effectively sell products through these growing online consumer marketplaces and reach new customers using one low-cost, single point of integration. During 2004, Mercent signed dozens of new customers that include leading retailers GUESS?, Crabtree & Evelyn, Lucky Brand Jeans, Wet Seal, and others. Key distribution partners include Amazon.com, Yahoo! Shopping, MSN Shopping, Froogle, and other leading online consumer marketplaces.

"This investment from Madrona Venture Group is a testament to the significant value we bring our retail customers and additional validation of our business strategy," said Eric Best, Founder and CEO of Mercent. "Madrona is the perfect partner given their expertise and track record supporting high growth ventures like Mercent."

Rob Garf, Senior Analyst for AMR Research, noted that "by using Mercent to establish a single integration point that supports the synchronization of product data and sales analysis among multiple channel partners, retailers reduce the cost and time required to merchandise and sell through external shopping portals. With these increased efficiencies, the retailer can now support a richer set of e-commerce activities, including site-specific product assortments and more targeted product promotions." (source: AMR Research Alert, September 28, 2004)

About Madrona Venture Group

Headquartered in Seattle, Washington, Madrona manages a $250 million fund that targets regional investments in Enterprise Software and Services, Consumer Software and Services, and Wireless, Networking and Infrastructure. Since 1995, Madrona has invested over $150 million in a diversified portfolio of early-stage technology companies and participated in almost 30 successful IPOs and acquisitions.

About Mercent

Founded by veterans of Amazon.com, Mercent is the single solution for online marketplace retailing. Mercent's flagship product, Mercent Commerce System, allows multi-channel retailers to effectively promote and sell products to more than 100 million shoppers across 10 leading online consumer marketplaces through one low-cost, single point of integration. These marketplaces include Amazon.com, Yahoo! Shopping, BizRate.com, PriceGrabber.com, AOL inStore, NexTag, MSN Shopping, Shopping.com, mySimon, and Froogle. In addition, Mercent provides value-added services such as program management, data mapping, software development and integration, storefront design and optimization of search keywords and product categorization. Mercent customers include GUESS? (NYSE:GES), Lucky Brand Jeans (NYSE:LIZ), Wet Seal (Nasdaq:WTSLA), Finlay Enterprises (Nasdaq:FNLY), Proflowers (Nasdaq:PRVD), Crabtree & Evelyn, Car Toys, Fortunoff, The Shane Company, and other leading retailers. Mercent is a venture funded company based in Seattle, WA and is a Microsoft Certified Partner and an Amazon Services Certified Systems Integrator.

For more information, please visit www.mercent.com.