Huntsman Gay made the investment because it is betting that the next generation of growth in the business-to-consumer space will be multi-channel sales. And iCongo has software that enables commerce anywhere, says David Dame, a Huntsman managing director. For example, customers will be able to order products online or via a catalog and then pick up the item at a store. “We have software that allows you to do that in a cost efficient way,” Dame says. “This allows customers to have more impulse buys.”
Huntsman Gay wouldn’t disclose how much capital it provided or whether it will have a minority or majority stake. The Palo Alto, Calif.-based buyout shop typically invests $25 million to $125 million, Dame says. He noted that the investment was “in the lower part of that range.” The deal has already closed, he says.
The sellers were mainly iCongo’s management and they will have a “meaningful” stake going forward, Dame says. Outside of Huntsman, there are no other investors in the company, he says. Huntsman’s investment comes from its first fund, which raised $1.1 billion in 2009.
iCongo, which is based in Montreal, currently has more than 100 customers. The company is profitable, Dame says, although he wouldn’t provide any financial information for iCongo. “It’s a healthy company that has been around for 10 years,” he says.