N2N Commerce, a Cambridge, MA-based e-commerce company that raised $30 million from General Catalyst Partners and Limited Brands (from which it spun off), laid off essentially all its staff just before Christmas and is ceasing operations, says a source close to the company, confirming a report yesterday in TechCrunch. The source also says the 18-month-old startup had missed a series of milestones in delivering its technology to key customer Victoria’s Secret, prompting the lingerie firm to withdraw its business and essentially sealing N2N’s fate.
N2N’s goal of developing a cross-channel commerce platform—allowing large retailers to integrate and manage content and sales across the Internet, catalogs, and physical stores—was ambitious. Our source believes N2N’s technology was promising, and “not an unqualified failure.” However, the source adds, “they definitely missed some important milestones.” Also evidently contributing to N2N’s problems was internal politics at Limited Brands, the corporate parent of Victoria’s Secret. The source did not elaborate on that point.
N2N launched in June 2006. Last February, it announced a $30 million Series A funding round that marked New England’s largest venture deal in the first half of 2007.
A call to N2N CEO and president Ruben Pinchanski and an e-mail to the firm’s press contact went unreturned, as did an e-mail to General Catalyst.
Kudos to TechCrunch’s Erick Schonfeld for breaking this story. Schonfeld also had a key insight: “In retrospect, the warning signs were everywhere: 1) big company spin-off; 2) raised way too much money for a series A round; 3) reliance on that same big company as its main customer (and as an investor).”
