The Mountain View, Calif.-based online business directory and social network MerchantCircle has sold for $60 million in cash and stock after raising $14.3 million over two rounds from Rustic Canyon Partners, Scale Venture Partners, Square 1 Bank, and Steamboat Ventures. The company was purchased by the online advertising business Reply, based in San Ramon, Calif.
Reply! Inc., the leading marketplace for the acquisition of locally-targeted consumer traffic, today announced that it has entered into a definitive agreement to acquire MerchantCircle, the largest online network of local business owners in the nation, for $60 million in cash and stock. The transaction is expected to be completed in Q3 2011. Reply! founder and CEO, Payam Zamani, will be CEO of the combined companies, which will be called Reply! Inc. With the acquisition of MerchantCircle, Reply! greatly enhances its access to local merchants and consumers, and enables the combined companies to rapidly shift locally-targeted advertising dollars online. Individually, each company is profitable, and the combined company projects revenues of over $100 million in 2012.
Upon completion of the acquisition, Reply! will be comprised of two components: Reply! Marketplace – the company’s online marketing platform for the acquisition of locally-targeted and category-specific consumers on a cost-per-lead or cost-per¬-Enhanced Click™ basis; and Reply! Media – the company’s portfolio of media properties that includes MerchantCircle.com, Contractors.com, Bloglines.com, iMotors.com, and many other consumer-facing destinations. Founder and CEO of MerchantCircle, Ben T. Smith IV, will be President of the Reply! Media Division, reporting to Zamani.
“There is a multi-billion-dollar market opportunity in providing a practical and scalable online marketing solution for powering locally-targeted commercial transactions,” said Reply! founder & CEO, Payam Zamani. “Reply!’s Marketplace, combined with MerchantCircle’s network of local merchants and millions of local consumers, position the company to revolutionize locally-targeted online marketing and solve a major problem for locally-targeted businesses, who are frustrated by the complexity and lack of effectiveness of search engine marketing and display advertising.”
“Payam and I are united in our vision of bringing local consumers together with locally-targeted businesses on a massive scale”, said Ben T. Smith IV. “The combination of our two companies allows us to expand the delivery of leads to every local business and to provide consumers an easy way to connect with the best merchants in their area. MerchantCircle’s investors and I see a huge opportunity to grow the company into a significant force in the local space.”
After the acquisition, Reply!’s major assets will include:
• The patented Reply! Lead and Enhanced Clicks™ auction Marketplace, powering an industry-leading platform for the acquisition of locally-targeted customers
• Over 25 million unique local visitors per month to the Reply! Network of consumer destinations
• Over two million member local merchants using the Reply! platform to access ready–to-purchase consumer leads
• Access to over one million consumer leads per month in virtually every category
• Major online consumer destinations including MerchantCircle.com, Bloglines.com, Contractors.com, iMotors.com and many more
Founded in 2005, MerchantCircle is the largest online network of local business owners in the nation, combining social networking features with free marketing tools that enable merchants to maximize their online visibility. Over 1.6 million merchants use MerchantCircle to create conversations with customers and connect with other local merchants. MerchantCircle is based in Mountain View, Calif., and funded by Rustic Canyon Partners, Scale Venture Partners, Steamboat Ventures, and IAC. Learn more at http://www.MerchantCircle.com or visit our blog at http://blog.merchantcircle.com/.
About Reply!, Inc.
Reply.com operates the leading auction marketplace that enables advertisers to acquire locally-targeted and category-specific customer prospects on a cost-per-Enhanced Click™ or cost-per-lead basis. By eliminating the need for advertisers to develop and maintain complex, expensive online marketing infrastructures and teams of experts to source online consumer traffic from many different channels, Reply.com simplifies online locally-targeted marketing for businesses of all sizes. To learn more about Reply!, visit www.reply.com. Additional information is available at blog.reply.com.