Cloud-based software-as-a-service developer WebLinc, oldest and largest of Philadelphia's cluster of Old City software firms, grew a lot with last year's acquisition of Canada-based Orderbot, plus new orders for its flagship platform, whose retailer users include Hello Kitty, U.S. Polo, Do It Best, and Urban Outfitters' smaller brands.
WebLinc, founded in 1994, and based upstairs from the National Mechanics bar on Third Street since founder Darren Hill and his wife, restaurateur Kate Swan, bought the ex-church-turned-nightclub in 2006, topped $50 million in sales last year, up from $35 million in 2015, according to people familiar with the business.
But headcount only rose 10 percent, to about 165, which shows Hill is scaling up profitably on the engineering and sales base he built here, at Orderbot headquarters in Vancouver, and at satellite offices in New York, Los Angeles, and Toronto.
To avoid confusion between the company and its growing product menu, WebLinc on Wednesday rechristened its main platform as Workarea Commerce Platform. "This is big for us. I'm psyched. It's cool," said Hill, who plans to add another 15 or so engineers and salespeople this year.
Hill made the election news last fall when he offered to relocate any employee uncomfortable with the incoming Trump administration to his company's new Canadian offices. He told me several, including immigrant techies and others concerned about social tolerance, are considering going North, but no one's left yet.
It's a sign of the costs digital start-ups run up that Radnor-based Safeguard Scientifics, which controls 38 percentof WebLinc, has been carrying the firm on its books at $7.8 million, two years after investing $11 million. Indeed, all but one of Safeguard's other eight digital-media firms have reduced valuations. Hill says Safeguard boss Steve Zarrilli has been patient and supportive.
WebLinc has been in business long enough that some of its alumni have gone on to other things, including Anthony Bucci and his Drexel-grad partners, who in 2006 split to form Revzilla, the online motorcycle-parts company that's been expanding under private-equity ownership (Bucci recently announced he's stepping back from the CEO role.)
The retail-software business "is consolidating rapidly," Hill told me. Oracle has purchased a string of WebLinc rivals. "They did a pretty good job combining a lot of stuff into one behemoth platform. They're a freight train. We're a race car." Oracle clients are in the $500 million and up range (yearly sales). The typical WebLinc retailer is in the sub-$200 million range.
The Philadelphia area is home to a number of online-retail giants — including Urban, as well as Radial (the former GSI Commerce/eBay Commerce), and GSI founder Michael Rubin's Kynetic, which includes the Fanatics pro and college sports gear empire. WebLinc stays focused on software: "We don't have stores. We don't have a warehouse. We don't do fulfillment. We do warehouse software," Hill says.
Philadelphia still punches below its weight as a software center. I asked Hill if the city's efforts to make software firms comfortable with subsidies and small direct investments was helping lure jobs downtown.
"I'd much rather they fixed Third Street permanently," he told me. "I'd rather they spend money on tourism. It makes it better for when clients from out of town come in. Clean the streets a little better."
City taxes aren't that high, compared to "Bala Cynwyd or South Jersey or New York, it's amazingly inexpensive," he said. Most of his staff bikes or walks to work.
It's a lot easier to find restaurant worker and managers than software developers and programming chiefs in Philadelphia, Hill added. "We compete with very few companies on hiring, on a regular basis," he said. "Urban Outfitters has a good team. And Comcast, they have a pretty sizable team. They see Amazon as a competitor. It's a big deal that Hulu can talk to your remote now. They're fighting cord-cutters."