September 14, 2011
By the ZippyCart Content Team
Michael G. Rubin, founder of GSI Commerce, announced the launch of his new holding company Kynetic Monday.
The ecommerce solution entrepreneur’s launch of Kynetic comes after he sold GSI Commerce to eBay this year for $2.4 billion. Rubin spent 12 years building up GSI’s network to service 150 of the top 500 Internet retailers. Kynetic includes three brands that were excluded from the sale to eBay; RueLaLa, Fanatics, and ShopRunner. Rubin predicts that the brands will produce more than $1 billion in revenue during 2012.
Rue La La, part of GSI’s 2009 acquisition of Retail Convergence, is a site that offers discount deals on clothing, travel, and more. It is a competitor of Gilt Groupe Inc., another flash-sale site focusing on fashion. Rue La La is projected to generate $400-$500 million in revenue in 2012.
Fanatics operates ecommerce solutions for professional and collegiate sports merchandise and apparel. The Fanatics division includes professional sports league sites such as MLB.com and NFL.com, as well as its own sites including FootballFanatics.com, one of the most popular football fan gear sites on the Internet. Rubin projects that the division will generate $600-$700 million in revenue during the first full year of operation.
ShopRunner competes with Amazon Prime, offering free shipping from 50 Internet retailers for an annual fee of $79. The ShopRunner network started with 12 retailers and now includes dozens of brands such as Sports Authority, GNC, and PetSmart. Consumers can sign up for a 30-day free trial of ShopRunner on the website to start adding items to their shopping carts.
Although these three companies will be the focus of Kynetic, each brand will have the ability to make more acquisitions and add to their assets. GSI Commerce had a much broader focus with the roughly 20 businesses that it ran before before eBay acquired the company. Rubin had this to say:
“I have been a business builder all of my life and I am thrilled to bring my enthusiasm for business to Kynetic. The energy in the online commerce space is unprecedented. As the Kynetic name connotes, we are tapping into that energy and using it to drive innovation that will keep our companies at the forefront of the industry. I am genuinely excited about the prospects to propel the growth of Kynetic and our industry-leading brands.”
eBay is loaning the Kynetic $467 million and Rubin is investing an additional $31 million in the ecommerce solution. Rubin has received recognition throughout the media for his success as an entrepreneur in such outlets as The Wall Street Journal, The New York Times, BusinessWeek, and People. He also appeared on the CBS show “Undercover Boss” during its first season. In 2010 Forbes included him in its list of “America’s 15 Most Powerful CEOs 40 and Under”.
Gavin is a graduate of Washington State University where he studied Communication with a public relations emphasis. He left Pullman behind and currently resides in the Queen Anne neighborhood of Seattle where you might run into him at happy hour. When he is not writing something for ZippyCart he enjoys travelling. His favorite film is Pulp Fiction (Say what again. Say what again, I dare you, I double dare you...! ) and his favorite movie genre is zombies. Follow him on Twitter: @_gdonnelly
