Last week, httprint announced that they received $12 million in new funding from Bertelsmann and Investcorp. On the same day, httprint announced the acquisition of Germany-based Publishers Market AG, a firm that specializes in Web-enabled print advertising workflow solutions.

In the aftermath of the dot com era, new funding announcements are less glamourous. Raising money these days is notable, but it usually indicates negative cash flow, significant concessions or a last grasp by current investors. In httprint’s case, it appears to be a validation of their model and a real focus on continuing their worldwide expansion. (revenue is evenly split between the U.S. and Europe) The company is close to sustained profitability and CEO Mark Porter says httprint has "negligible debt."

And now there is the Bertelsmann factor. Bringing this media giant to the table is huge for httprint. First, Bertelsmann is known for their intense scrutiny when selecting companies to invest in. During the Internet upswing, the company realized a $7 billion real cash gain from a total of $2 billion invested in technology companies.

Secondly, Bertelsmann as a customer should not be underestimated. Bertelsmann is the world's largest book publisher and a major force in magazines, music and European TV. Other technology companies have fumbled when merging investor relationships into profitable customer relationships. In this case, Bertelsmann has already spoken and the opportunity is clearly there for httprint to take. “We chose httprint because its successful growth will continue to be driven by print-focused supply chain solutions that will help Bertelsmann and other major print buyers achieve cost savings and efficiency improvements.” - Jan Kantowsky, Managing Director of Bertelsmann Capital Ventures who has joined httprint’s board of directors.

WTT: httprint has been somewhat "against the grain" with your e-procurement solution from the beginning. When everyone else was trying to get online applications to replace human intervention - you were using it as a tool to supplement the personal relationships that have always existed in print procurement. Would you comment on httprint’s strategy? Has it changed since the "dot bomb" eliminated some of your competition?

Mark Porter: No, it hasn’t changed, it just seems to be getting more attention now that expectations have returned to normal. Since we originated as a print buying organization, we felt we were especially in touch with buyers’ needs, and that behaviors would not change overnight.

We offer print management outsourcing for typically large organizations, and we have supplemented that with procurement software on which a company can centralize all of its print purchasing. In any organization, you have people everywhere ordering print, whether it be business cards and envelopes or direct mail and more complex commercial print. It’s amazing the number of suppliers a company will actually be using, even though somewhere there are 30 or so "authorized" suppliers. Our software can become an enforcement device for getting everyone to comply with the volume discounts negotiated by leveraging the volume purchased by the entire organization.

Most companies are buying as if they were really many different, smaller organizations, and that is reflected directly in the price they pay. Our outsourcing model is designed for companies that do not wish to have teams of production experts on hand. Printing should be a non-core, back-office function for most companies and that means all or part of it should be outsourced for savings. Because most organizations are not ready to 100% adopt a software solution overnight, these services we provide give them a sensible migratory path and a partner who understands print procurement intimately.

By offering both software and services, we provide cost saving solutions for today and tomorrow.


WTT: Standard Register is a large commercial printer that has developed a series of applications in Smartworks that includes e-procurement, and ImageX could be considered an e-procurement company that has "morphed" into a commercial printer. How does httprint fit? Do you have your own print facilities or do you outsource the production and fulfillment of printed materials?

Mark Porter: We are now and will always be supplier-agnostic. We think this is very important because we are not beholden to any specific supplier, equipment, schedule or geography. That means customers who would like to outsource to us will have their work performed by the right supplier(s) for the job. Price, quality, location, and schedule – we have suppliers worldwide who can accommodate any requirements. The companies you mention and others cannot operate as freely. Furthermore, when companies ask us to come in and streamline their existing print spend, we are not trying to force out existing suppliers in exchange for our own. The best suppliers will be chosen in every case and, in fact, our clients often introduce us to new suppliers. We are always looking to add new suppliers if they meet our best practices criteria.


WTT: Though it’s costly but not so complex to set up "distribute and print" networks, it seem to be a challenge to keep them "fed" with jobs that fit the hardware and geographic requirements. Would you comment on your move to build an international system?

Mark Porter: We are currently providing solutions based on client needs. We have specifically built a distributed print network for one of our customers that is saving them an enormous amount of money if compared with the way they used to do it. Our supplier base and purchasing volume are growing and will continue to do so. This has many benefits for customers of our outsourcing and of our software solutions.


WTT: While customized catalogs and print e-procurement seem to have evolved from office stationery to marketing materials, you have a number of magazine publishers as clients. And now you’ve secured an added investment from Bertelsmann who is recognized as a successful book publisher. Supporting magazine and book publishing could be considered more "complex" than procurement and production of office stationery and marketing materials. Tell us about your solutions for your publishing clients?

Mark Porter: This is an area where our hybrid model adds a lot of value because publishing not only involves printing and distribution but also editorial, design, advertising, etc. We have clients who use our outsourced team to traffic all aspects of the process, but we will also have clients who will use our collaboration tools to manage the process themselves. Bertelsmann also owns one of the largest publishing companies in the world in Gruner & Jahr, so there are advantages there to draw on as well.


WTT: Tell us about your alliances with equipment manufacturer KBA?

Mark Porter: KBA is the third largest press manufacturer in the world, and they are a customer of ours. They have integrated our e-commerce system, which includes color management/monitor calibration/preflighting, into their Karat Digital presses. With each of these presses they sell, they are upselling to include this Web-enabled feature. So far, they have been piloting this program and have sold three or four in Germany. This has proven to be a success. We are getting ready to roll it out across Europe and the US as well, so this represents a sizable sales channel for us.

We are also working with them and others to develop a similar system for some new digital Web presses. Digital presses essentially run directly from a computer-generated file, so the customer’s ability to very simply and quickly calibrate a desktop monitor to the precise settings of the press allow for an on-line press check, thereby eliminating the time and expense of being there in person. Digital presses also have very little set-up time and spoilage, so this is opening up a lot of possibility for both digital printers and their customers.


WTT: Your acquisition of Publishers Market. Tell us about this company and how you plan to integrate them into httprint.

Mark Porter: Publishers Market has a workflow solution called AdSpectra that allows for electronic placement of print advertising and delivery of ad materials. This product has gained quite a bit of traction in Germany with major publishers who request to receive all of their advertising in this manner. For us, this represents a two-fold opportunity. First, we have a product which complements our own and further satisfies the needs of the creative professionals within an organization and, second, we have significantly expanded our base in Germany which is the largest printing market in Europe. Adding this to our already substantial bases in the UK and Benelux (Amsterdam), we have the largest European operations of any company in our space.


WTT: It’s impressive to raise money these days, but most people we spoke with were impressed with the ability to get Bertelsmann’s support. Tell us about your most recent round of funding and what this means for httprint.

Mark Porter: This funding is important for two primary reasons. First, it gives us the capital we need to return to profitability after successfully launching the e-procurement portion of our business. And second, the fact that not only did our existing investors step up, but that we also added arguably the most desirable strategic investor out there, should send a loud message to the market that we have the financial wherewithal, the strategic support and the business model that will make us market leaders.

It’s no secret that raising capital in these times is no easy feat. We were able to attract this funding because there has been a return to business models more firmly planted in reality; our sales are evenly divided between the US and Europe and are growing rapidly; our e-procurement software sales are highest in the industry; we are near profitability; and we have negligible debt and an incredible team of talented and dedicated people in every office and workstation.



Thank you Mark.