Chicago's Channel IQ gets backing from Silicon Valley Bank

via www.crainschicago.com

January 18, 2012

By Steve Hendershot

Online pricing intelligence firm Channel IQ announced late Tuesday it secured a line of credit from Silicon Valley Bank, part of Santa Clara, Calif.-based SVB Financial Group.

Channel IQ helps manufacturers monitor their products' pricing and promotions online, tracking consistency and performance among approved retailers and identifying unapproved online sellers. Channel IQ began in 2009 as a division within Chicago-based manufacturing logistics firm Channel Velocity Inc.; Channel IQ spun out of Channel Velocity in 2010 and launched officially in April 2011. It has about 80 customers including brands such as Panasonic, LG Electronics and Toys R Us.

Channel IQ is also nearing completion of a separate investment round, but the line of credit “means we have use less equity,” said Wes Shepherd, CEO of both Channel IQ and Channel Velocity. “I like setting up multiple moats to make sure we have our bases covered; you have to be careful until you turn profitable.”

Shepherd wouldn't disclose specific revenues or say how soon Channel IQ will be profitable, but said the company's revenues are already more than several million dollars a year. He said a new “Dealer Verification Badge” for third-party retailers was a hit at the Consumer Electronics Show in Las Vegas last week, and rounds out Channel IQ's offerings.

“We don't see any competition of significance when it comes to what we do,” Mr. Shepherd says. “We are rather unique. When it comes to large deals and big brands, people who have the budget and really care about their brand and their retailers and their product, they pay good money and look for the best. And that's where we are— we're the best now. We've almost created a whole new business category, and we just have to keep building on that.”

Mr. Shepherd declined to disclose the size of the line of credit, other than to say that it is more than $500,000. He plans to use the money to expand his staff from 40 to 60 over the next 12 months, and enhance Channel IQ's sales operation.

Channel IQ is known legally as OnRamp Technologies LLC and is based in the same building as Channel Velocity, 350 W. Ontario St. Click here to read a Crain's interview with Mr. Shepherd from May 2011.