More NewsFairMarket Gets Investment from eBay

FairMarket Gets Investment from eBay

The auction king rides to the rescue with a small but strategy investment in the auction-based e-commerce marketer. If You Auction Here, You'd Be Home Now

Leading online auctioneer eBay Inc. has made a small but strategic equity investment in Woburn, Mass.-based FairMarket Inc., a provider of private-label, e-commerce solutions that incorporate eBay’s dynamic pricing system, the two companies announced on Monday.

Under the terms of the investment, eBay invested $2 million and received 952,380 shares of Series B Preferred Stock of FairMarket for a per share price of $2.10 and certain registration rights. Shares of FairMarket’s common stock on Monday closed at $1.23

The deal comes a month after the two companies agreed to an exclusive arrangement to roll out similar loyalty programs to major national brands in other categories. Earlier this year, the two companies announced that FairMarket would provide the platform for the promotional loyalty program that eBay is testing with Burger King Corporation.

But FairMarket has also seen its fair share of problems, taking in only $1.3 million in first quarter revenue and losing $12 million.

“Counting eBay as a strategic investor will unquestionably strengthen our relationship while servicing eBay in new growth areas will definitely help to build FairMarket’s business,” said Nanda Krish, president and chief executive officer of FairMarket.

FairMarket and eBay began working together when FairMarket was among the first companies to integrate eBay’s API and later joined eBay’s Preferred Solution Provider program.

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