Today hybris announced it has secured an additional $30M in funding from two Silicon Valley VC giants (Meritech Capital Partners and Greylock Israel). This funding comes only 18 months after hybris took a significant funding round from Huntsman Gay Global Capital to secure their acquisition of iCongo in August 2011. Despite an unprecedented period of growth over the past two years the firm has remained profitable. So why has hybris taken this additional round of funding and what does it mean for customers, prospects and partners?

  • It allows hybris to retain independence while growing credibility and market share. This additional round of funding buys hybris a window of security to maintain their independence in the market, allowing them to focus on R&D and scalable expansion without the distractions of the need to do an IPO or the threat of acquisition. By adding two leading VC firms as investors, the firm is clearly signaling to the market their intent to solidify their position as a global leader in the commerce technology market.
  • The IPO / M&A can has been kicked down the road – for now. The destiny of hybris is now firmly in the hands of its VC investors. As the firm continues to grow, speculation will likely continue that software giants like SAP or Adobe may be interested in an acquisition, however the likelihood of such an event is dwindling as the price tag for such a move becomes increasingly difficult to swallow. Acquisition is still a possible outcome, but the most likely long-term outcome is that the firm pursues an IPO, although that is now unlikely until 2014 at the earliest. 
  • Headcount will grow. hybris recently reached about 600 staff globally and continues to hire primarily across R&D, sales and partner enablement. Forrester does not expect the rate of headcount growth to continue at the same pace as in the past 18 months, but we do expect hybris to make additional talent investments especially in North America and emerging markets. 
  • APAC and South America expansion will become a top priority.  With the acquisition of iCongo, hybris bought themselves a North American sales force, which now successfully competes head-to-head with Oracle, IBM and Demandware in almost every commerce related opportunity. However, in emerging markets like South America, the Middle East and APAC, hybris is currently dependent on partners and lacks the on-the-ground resources to compete effectively with IBM’s and Oracle’s established sales presence in these markets. This latest funding round will in-part be used to grow sales, sales engineering and partner enablement programs in these emerging markets although success will not happen overnight nor is it guaranteed.
  • Industry specific solutions will likely expand. Traditionally, hybris has enjoyed success in the retail, manufacturing and wholesale distribution (B2B) verticals and has created both B2C and B2B accelerators for these industries. In the past 12 months the firm also developed industry specific accelerators to support the telecommunications, software, gaming, media and publishing markets.  Forrester expects hybris to further expand its set of industry accelerators, with financial services and healthcare being obvious areas of opportunity, thus allowing them to compete with IBM and Oracle across a diverse set of industry verticals. 
  • The product set will likely diversify beyond eCommerce and PIM. hybris has spent much of the last 18 months building order management (OMS) capabilities into the core product, primarily to support their omni-channel retail clients. Although it is unlikely that hybris will offer this OMS capability on a stand-alone basis to complete with directly with IBM’s Sterling Commerce or Manhattan Associates, Forrester does expect the firm to expand its product portfolio beyond the core eCommerce and PIM solutions through the development of additional modules. Likely candidates for increased investment in R&D or targeted acquisitions include retail store systems, CRM, WCMS and industry specific accelerators.

So what does the future hold for hybris? For now it’s business as usual. The firm believes it has the assets in place (strategy, technology, funding and people) to further solidify its place in the market as a leading player in the global commerce platforms and services market, which Forrester estimates is worth $17.3 billion in 2013*. 

I look forward to your thoughts below in the comments.


* Clients can access our market sizing analysis by contacting your Forrester Account Executive.