Demandware Secures $12 Million in Series B Funding

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Co-led by General Catalyst and North Bridge Venture Partners, investment underscores support of Demandware’s ecommerce delivered as SaaS model.

Demandware, Inc. (, provider of the Software as a Service (SaaS)-based ecommerce platform that offers merchants the optimal combination of control, flexibility and a usage-based pricing model, today announced that it has raised a $12 million Series B round of funding, bringing its total raised capital to $22 million. The round was co-led by both of Demandware’s Series A investors, General Catalyst Partners and North Bridge Venture Partners, with participation from Demandware management. The financing will be used to support the continuous enhancement of Demandware’s ecommerce solution functionality, support its hiring plans, and expand the Company’s sales and marketing activities in order to capitalize on the market opportunity for ecommerce solutions.

“We are pleased to have received a vote of confidence from both of our Series A investors through this latest round of funding," said Stephan Schambach, CEO of Demandware. “Both Larry Bohn of General Catalyst Partners and Michael Skok of North Bridge Venture Partners are experienced and knowledgeable investors in this market space. Our management team is looking forward to working with Larry and Michael to build on our mutual success, leveraging the tremendous knowledge, experience and network of contacts that they offer.”

Demandware’s SaaS-based ecommerce solution enables retailers to meet their ecommerce revenue and profitability goals with a unique combination of merchandising control; the flexibility to adapt ecommerce functionality to meet changing business needs; and the optimal profitability that only a usage-based, Software as a Service-enabled pricing model can provide. The company was founded in the spring of 2004 by Schambach, who earlier founded Intershop, a leading provider of e-commerce software for centralized management of all online business channels, and led Intershop to a successful NASDAQ listing in 2000.

“The Demandware team executed on its vision of developing the first fully customizable, on-demand ecommerce solution,” said Larry Bohn, managing director, General Catalyst Partners. “This is a tremendous accomplishment that is further complemented by a terrific customer list that includes Vermont Teddy Bear, Gardener's Supply, Zabars, Ansel Adams and, among others. Undoubtedly, Demandware has made

significant progress since our initial investment and we look forward to working with the team to increase the company’s footprint and continue to deliver the best on-demand ecommerce product in the marketplace.”

“Delivering an eCommerce platform using a Software as a Service model presents clear benefits to the rapidly-expanding online retail market,” said Michael Skok, general partner of North Bridge Venture Partners. “Demandware is spearheading the movement by providing merchants with the merchandising control, flexibility, functionality and interoperability of a full ecommerce application suite with a usage-based pricing model. Demandware’s excellent customer traction gives us further confidence in this delivery model and this team’s ability to execute.”

According to Gartner, Inc.’s research report, “Software as a Service Will Be Business Model of Choice by 2008,” more than 50 percent of software purchased will be via service by 2008.

Demandware is also at the forefront of the exploding online retail market. According to technology and market research company Forrester Research’s “State of Retailing Online 8.0” study, online shopping continues to grow. Online sales for 2005 are expected to reach $172 billion – which represents a 22% increase over 2004 – while the number of U.S. households shopping online is expected to reach 37.4 million.

About Demandware, Inc.

Demandware provides an enterprise-class ecommerce platform, delivered as a service, which offers online retailers the merchandising control, flexibility, functionality and interoperability of a full ecommerce application suite with a usage-based pricing model. With Demandware, merchants can deliver custom ecommerce solutions without buying software or operating expensive datacenters. Demandware was founded by a team with proven expertise from leading ecommerce software and infrastructure companies including ATG, Macromedia, Intershop and NaviSite. The company has strong backing from North Bridge Venture Partners and General Catalyst Partners. For more information about Demandware, visit

About General Catalyst Partners

General Catalyst Partners is a venture capital firm that invests in exceptional entrepreneurs who are building the technology-based companies that will lead innovation and transform industries. Founded in 2000, General Catalyst Partners leverages its principals' extensive operational, business development and technological expertise to provide portfolio companies with a catalyst for success through business-building and partnership development assistance. General Catalyst has approximately $1 billion under management and is headquartered in Cambridge, Mass. For more information, please visit:

About North Bridge Venture Partners

North Bridge Venture Partners is an active, early-stage venture capital firm based in the Boston area. With approximately $1.3 billion under management, North Bridge focuses

on investments in the communications, software and other technology markets. Working closely with entrepreneurs, North Bridge adds value by providing strategic guidance, specific industry knowledge, team-building skills and an in-depth understanding of both private and public financings. Past investments include ArrowPoint Communications, Cascade Communications, eRoom Technology, Phase Forward, Solidworks, Sonus Networks, Sycamore Networks and Wellfleet Communications. For more information about the company, please visit

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