If you measure the health of Philly’s tech scene by how many exits go down, we might have some news for ya.
Analytics software company RJMetrics has sold its legacy CloudBI business for an undisclosed amount to Silicon Valley ecommerce company Magento. RJ officials say Magento will retain 37 members of the company’s current staff of 67.
The other half of the Center City-based analytics company — its Pipeline division, which launched in the fall of 2015 — will spin off to become a new company called Stitch (here’s the new website already), with cofounder Jake Stein at the helm.
"This is not a billion-dollar outcome like Groupon was to Chicago. But it's part of what needs to happen as we search for something like that."
The remaining 30 members of RJMetrics’ staff will be joining this new venture, along with cofounder and CEO Robert Moore, who will serve as Chairman of the Board of Directors.
After years of writing about RJMetrics — from its big fundraising efforts and posh new offices to its recent layoffs — today qualifies as big news. RJMetrics has long been one of Philly’s leading startups: a characteristically unsexy business in the B2B trenches that has made it work, that has established itself as a bellwether of the Philly startup scene.
One of the few disclosed terms of the negotiations, which started in February 2016, is that Moore will also head Magento Analytics, the cloud business intelligence division of Magento that RJMetrics will turn into.
"We love the Philly location and intend to build out there."
Mark Lavelle, CEO of Magento, told Technical.ly that the acquisition will let the company establish an East Coast beachhead out of Philly. “They will bring a team of dedicated, passionate experts to our team,” said Lavelle. “We love the Philly location and intend to build out there.”
Magento is a 500-employee company headquartered in Campbell, Calif., with offices in a dozen cities across Europe and the U.S. The company handles ecommerce operations for some 250,000 global businesses.
The West Coast company also has some Philly-area history: it was once owned by GSI Commerce, which was based out of King of Prussia, Pa. In 2011, when GSI was acquired by eBay, so too was Magento. Later spun out of eBay Enterprise as a standalone company, this is Magento’s first acquisition.
So what does this move mean for Moore? His name has been tied for years to the RJMetrics brand, rap videos and all. Was this the exit he was hoping for when he and Stein set up their first office back in 2009 fresh out of the Ivy League?
Sitting in his Center City office overlooking City Hall, Moore said he felt the acquisition/spinoff combo was “pretty beautiful,” because it kept the Stitch idea alive and well funded while making sure the staff who worked for the CloudBI division was taken care of.
“One of my investors called it the Triple Lindy,” said Moore. “It’s threading the needle in such a way that you’re able to create a future that’s exciting without disrupting the universe you’re in, and being able to put capital into the new business without diluting shares.”
For what it’s worth, the move is coherent with what Moore said in February, when 20 percent of the company was let go. Back then he told Technical.ly that the layoffs were due to an updated product pipeline and not a sign of the company being on the ropes.
But is this the kind of big exit the local tech scene had been waiting for?
Moore himself admits it’s not, and with no clear sticker price for the acquisition, it’s hard to get a good read. The true indicator will be the performance of Stitch, whose early days mean a Center City office and a staff of 30. By no means are these humble beginnings for a Philly tech company.
“This is not a billion-dollar outcome like Groupon was to Chicago,” Moore says. “But it’s part of what needs to happen as we search for something like that.”
Emailed inquiries sent to RJMetrics investors — August Capital, Trinity Ventures and SofTech VC — were not immediately answered.