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GroupBy Acquires Edgecase, Sets Sights on Market Leader Shopify (Exclusive)

Site search ecommerce technology company GroupBy acquires product data company Edgecase

GroupBy, Inc., a Canadian ecommerce technology company focused on retail search, today announced that it has acquired Edgecase, an Austin, TX, based product data management company. The combination of GroupBy and Edgecase aims to create an end-to-end site search and merchandising retail platform that improves conversion rates, site performance and user experience. Financial terms of the deal were not disclosed.

As Gossage commented at the end of the interview, the deal “is not so much an acquisition as it is a merger — a merging of ideas and capabilities.”

Founded in 2014, GroupBy is a search, merchandising and SEO solution for ecommerce companies. By combining machine learning and curation tools, GroupBy helps online retailers drive revenue throughout the consumer shopping journey, from search to purchase. According to the company, more than 80 retailers, including Urban Outfitters, Cabela’s, and The Container Store, have improved  their conversion rates anywhere from 10 to 40 percent by using GroupBy’s site search solution.

Roland Gossage, CEO of GroupBy Inc.

“Solving the relevancy issue associated with ecommerce site search, and ultimately delivering a vastly improved user experience, is now a reality for the retail industry as we join GroupBy together with Edgecase,” said Roland Gossage, CEO of GroupBy, Inc. “With Edgecase, we are able to compound those efforts with a level of product data intelligence that is unparalleled in today’s market.”

Founded in 2012, Edgecase is a product decision platform that provides tools to help shoppers simplify online research and make purchasing decisions. Like GroupBy, Edgecase uses a combination of machine learning and human content curation, in this case to help online retailers provide a shopping experience that fuels product discovery and omnichannel engagement. The company’s clients include Crate and Barrel, Urban Decay, and Lancome.

Together, according to an exclusive interview with Roland Gossage, GroupBy’s CEO, the two companies envision moving beyond ecommerce search and product data management to become a total platform solution for ecommerce companies. Gossage said he aims to compete with big players like Oracle, SAP Hybris and Magento, some of the most comprehensive ecommerce solutions in the market today. He added that investors involved in this transaction think GroupBy “could become the next Shopify” — no modest aspiration, given that Shopify (NYSE: SHOP) is now a publicly traded company with a market cap of $10.5 billion.

GroupBy’s acquisition of Edgecase represents yet another example of the ecommerce technology market’s regrouping as vendors hone up their proprietary offerings to edge out competitors. Magento Commerce, for example, acquired RJMetrics in 2016 to enhance the B2C ecommerce platform’s big data and analytics capabilities. Industry experts forecast that online retailers will spend more than $2.1 billion on new ecommerce technology, which represents more than three times the spend from a decade ago. GroupBy’s purchase of Edgecase indicates the two companies’ ambitions to be the most comprehensive product data intelligence solution in the market.

GroupBy Office

Gossage believes GroupBy’s true competitive advantage — IP that has been patented — lies in its proprietary solution to “the edge cases of site search.” Analysts see that problem as a supremely difficult task: According to Gossage, Forrester Research’s lead analyst on B2B ecommerce, Andy Hoar, once told him that GroupBy is “‘tackling something that we’ve been trying to solve for a decade.’”

It is interesting to note that the acquiring company, GroupBy, has raised south of $4 million to date;  Edgecase, which is being acquired, has taken in a total of $17 million. As Gossage commented at the end of the interview, the deal “is not so much an acquisition as it is a merger — a merging of ideas and capabilities.”