E-commerce Software Company Mercent Announces Series A Financing

Massive Growth in Online Marketplace Retailing Attracts Madrona Venture Group as Lead Investor

Seattle, WA — January 19th, 2005 — 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
Mercent is a leading provider of online channel marketing technology and services for retailers. Through its award-winning Mercent Retail™ SAAS technology and Mercent Performance™ professional services, Mercent helps the world’s most successful online merchants including 1-800-Flowers, Bass Pro Shops, Brookstone, GUESS?, L'Occitane USA, Redcats Group, and REI optimize online shopping channel marketing campaigns to drive customer acquisition, revenues, profits, and inventory velocity. Mercent is the single point of integration with a vast online advertising network that includes transactional marketplaces such as Amazon.com and eBay; comparison shopping engines (CSEs) such as Shopping.com and NextTag; affiliate marketing programs such as LinkShare and the Google Affiliate Network; and other product advertising channels including Microsoft Bing Cashback and Google Product Listing Ads (PLA). The company is a 'Selling on Amazon.com' Certified System Integrator, Buy.com Gold Certified Partner, eBay Certified Provider, certified Google Product Search Partner. Founded by a seasoned team of Amazon.com veterans, Mercent is a venture-funded company based in Seattle, WA. For more information, visit www.mercent.com.

Mercent PR Contact
Kristine Szarkowitz
press@mercent.com
Tel: 206-832-3900