According to PEHub, a regulatory filing revealed that CafePress has recently raised $8.3 million in Series C venture funding from Sequoia Capital, who also invested $14 million in a previous round. This brings the total funding of the online retailer of user-generated personalized products to $23.8 million.
Launched in 1999, CafePress enables its users to design, buy and sell expressive merchandise such as t-shirts, hats, bags, mugs, bumper stickers and the likes. CafePress handles the merchandising process and returns a cut of the revenue from sold inventory to its users. The company boasts serving a network of over 6.5 million members trading 150 million+ products, and also claims to receive 11 million unique visitors per month on average.
CafePress even made its first acquisition last Summer, and a significant one at that, buying Imagekind for $15-$20 million in cash and stock. The company has recently announced plans to expand internationally by taking its marketplaces to other English speaking nations like the UK, Canada and Australia.
CafePress claims to be profitable, which of course raises the question why the extra funding was needed to begin with. Most likely, the investors are providing CafePress with a safety cushion for the future consequences of the current economic downturn, as well as the necessary capital for the company to expand its base operations into even more countries.
For the sake of comparison: $28.3 million is only half of the backing that head-to-head competitor Zazzle has received to date, yet both Compete and Quantcast suggest that it receives twice as much traffic. Spreadshirt is another noteworthy player.
Update: CafePress has responded, saying that this story is incorrect:
We did not raise venture funding, nor have we raised funding from Sequoia since our series B in 2005. The Form D notice was filed with the SEC because we issued $8.29 million shares of stock back in July.
PEHub mistook a Form D notice which was filed with the SEC because CafePress issued $8.29 million shares of stock back in July.
Update 2: Dan Primack at PEHub explains what went wrong.
Update 3: Below is the SEC Reg. D filing in question, which does clearly state that the company sold $8.3 million worth of securities in July (page 3) to investors including Douglas Leone (a VC at Sequoia Capital) and OpenTable CEO Jeff Jordan. But as indicated above, this was actually an issuing of existing shares rather than a sale of new ones. The new SEC form that CafePress used does not make this clear. So much for transparency.
SEC Cease And Desist Order To Prosper – Get more Legal Forms
what happen to the doomsday speech about conserving funds
exactly. Sequoia loved telling everyone the good times are over. You think they’ll give us another slideshow when things start picking up? Probably not.
With so many people ‘losing their shirts’, business should swell.
Nice one.
It seems like the current economic trend would cause more people to design products at the site (hoping to earn a few bucks), and fewer people would buy them.
This would create a need for more resources with less income.
CafePress has also been offering a lot of discounts to the designers lately, trying to stimulate business.
And why not add a few new products to the stream? Perhaps new American made cars with custom paint jobs?
CafePress has impressive, conservative management who kills zazzle every time. watching zazzle do business is like watching a customization incubator, with 30 small, failing business struggling rather than one real business.
Focus, danielson. focus.
most of us in on-demand expect to see a gutted zazzle in the next six months. sloppy and overfunded.
We raised money from Sequoia? How come nobody told me?
Seriously, CafePress did not raise any venture capital, nor have we received funding from Sequoia Capital since our series B funding in 2005.
But thanks for all the kind words! Gotta go back to work stitching shirts for those that have lost theirs recently.
-Fred, CEO CafePress
Post updated, my bad.
Robyn,
where is the link to the alleged SEC filing?
Forgive me for being cynical, but it seems that many of your posts since you came on board at TC seem to be based on either conjecture or statements that you claim are fact, but you don’t post any of the details. These posts seem to be “negative” spin as well…
Do you have a chip on your shoulder? If not, then please “just the facts ma’n”
appreciated,
Evan
He’s the new Stephen Glass?
Stephen Glass
If there’s a regulatory filing, you could at least point to or quote from it? I think you have more of an obligation to correct or confirm your story beyond a snarky headline and a one line refutal.
Guessing it’s one of the paper varieties, not easily available online. Reg D are apparently the VC filings:
http://www.404....7-08-045929.txt
And here:
http://www.pehu...ess-nabbr-more/
http://www.sec..../publicdocs.htm
Is that how you request these documents?
A lengthy explanation of what happened w/ the peHUB CafePress item, and Reg D filings in general:
http://www.pehu...554/the-end-of/
It’s okay… due diligence and fact checking just get in the way, Robin. Don’t sweat accuracy – it’s overrated.
Great journalism!
Does TC ever check before publishing, or publishing is more important then getting things right?? that is good journalism for you..
Nice title!
Recently CafePress began competing with the artists for whom it acts as printer and shipper.
CafePress rents web shops to its artists. The artist creates a website page and manually loads the desired blank products. The artist imports his image onto each product, arranges the products on the page, describes the products, titles the products and tags the images.
Initially, the artist would set a markup and received the markup for each product sold.
However, recently CafePress began competing with its artists, using the artists’ own images. CafePress created a marketplace where a customer can search a keyword. That search brings up artist products. When the customer buys from the marketplace CafePress pays the artist 10% of the price CafePress set. Both the customer and the artist lose money. If the artist’s shop sells a t-shirt for $21, the artist makes $3.01. If the marketplace sells the same shirt for $25, the artist gets $2.50. The customer pays $4 more, and the artist gets $0.51 less.
CafePress tells artists to “promote your own shop,” but CafePress buys Google adwords using the very image tags the artist provided.
CafePress justifies this bait and switch of service terms by telling artists they can opt out if they don’t like the new terms; however, many have spent as much as 7 or 8 years creating as much as 88000 images.