Bigwords.com Takes $10M to School

Seeking to capitalize on the college textbook market, Bigwords.com garnered $10 million May 11 in its second round of venture capital financing.

Geocapital Partners of Fort Lee, N.J., led the transaction, and was followed by Bigwords’ first round investor, 21st Century Internet Venture Partners, which took a pro rata stake, said Matt Johnson, chief executive of the San Francisco-based company.

During the development of its business model, Bigwords decided to aggregate the entire textbook supply chain in order to create greater efficiency for the users of the site. “We have gone to more than 1,000 publishers, and we fulfill through them,” Johnson said. “That availability aspect keeps convenience as a factor.”

The company operates a distribution facility in Kentucky that Johnson said stockpiles the best selling items and manages other inventory on a “just-in-time” basis. Alongside this distribution process, the company intends to add some content to the site that Johnson hopes will create loyalty among users beyond the college years.

“We think that to succeed you need to understand the college market and its changes,” said Mark Diker, a general partner at Geocapital who will sit on the board of directors.

Johnson said proceeds from the round will be used to market the company in the college marketplace and to increase sales. The company witnessed an 18X increase in sales from the September 1998 buying period to the January buying period, Johnson said.

Bigwords raked in $2.25 million in its first round of financing that closed last November. Proceeds from that offering were used to hire additional management and to establish a foothold in the market. Johnson said the company has not determined when it would next seek capital, but indicated that a return to the private market is likely.