IPO Pool 2013: Rearden Commerce

There is a whole bunch of private companies thriving in the market today and are valued near or above a billion dollars in the private market. Today, we will talk about one of them. Readers may recall, we introduced you to Patrick Grady, CEO of Rearden Commerce while ago. Today, we will revisit Rearden and see how far it has come.

Rearden’s Founding

Foster City, California–based Rearden is a provider of a personalized e-commerce platform. It was founded in 1999 by current chairman and CEO Patrick W. Grady as a “personal assistant” in the form of a platform that helped an organization’s employees purchase or schedule travel. Rearden created software that would soon become an assistant that offered personalized options based on the employer’s travel policy and user identity at the point of purchase.

Today Rearden offers a suite of apps that help businesses with online transactions, including business travel reservations and consumer loyalty programs. Its smart apps help correlate an employee’s preferences and location with the availability of merchants to deliver relevant, engaging, and valuable experiences. Rearden claims that its solutions build end-customer loyalty for clients while saving money for employers through volume discounts offered by merchants aligned with their policies.

Its flagship product, the Deem e-commerce platform, leverages advances in big data, social media, and semantics to optimize the exchange of goods, services, and information between buyers and sellers. The platform helps to deliver a personalized one-to-one marketplace on which employees of businesses transact abundantly.

Rearden’s Offerings

Deem earns revenues through access to three key services.

It has enhanced its personal assistant offering to become “Deem @ Work,” which helps organizations manage cash flow and expenses through a suite of cloud-based applications. Besides offering business owners and employees discounted prices on products, the service also provides spending analytics.

Deem Offers is a configurable software platform through which organizations can deliver branded marketing offers and daily deals to users. Its intelligent technology presents the most relevant offers to the organization’s customers to encourage a more engaged and loyal clientele. Rearden acquired HomeRun, a site focused on localized discounts, in 2011 to enhance the offering with Groupon-like features and to add social networking capabilities.

Finally, for merchants, the Deem network delivers a personalized, one-to-one marketplace. Its web app uses analytics to make ongoing adjustments to maximize merchant profits.

Rearden’s platform has been distributed by more than 40 strategic partners, including American Express and JPMorgan Chase. Deem is accessed by more than 200 million consumers, 10 million businesses, and 1.2 million national and local merchants. In 2011, the platform helped process more than 14 million transactions worth more than $5 billion.

The company’s financials are not publicly known. To date, it has received $373 million in venture funding from investors, including Empire Capital Partners, Foundation Capital, Palo Alto Investors, Vinod Khosla, Burton McMurtry, Barry Newman, Val Vaden, Oak Investment Partners, American Express, Citigroup, and Chase Capital Partners. The most recent round of funding of $133 million in September 2011 helped value the company at $1.35 billion.

Unlike many other companies that get a great deal more attention, Rearden has operated rather more under the radar. We do not have their revenue information, so all we can do is make some guesses based on the transactions they have processed so far and the valuation number. My estimate is that they have over $150 million in revenue, which means they are part of the pool approaching an IPO this year.