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Josh Neblett with Etailz co-founders Sarah Wollnick and Tom Simpson. (Photos via eEailz.)
Josh Neblett with Etailz co-founders Sarah Wollnick and Tom Simpson. (Photos via eEailz.)

Etailz, a digital marketplace consultant and online retailer that operates sites such as Ecomom, EveryCasa and GreenCupboards, was acquired today by Trans World Entertainment for $75 million in cash and stock, a surprising development for the largely bootstrapped startup.

Etailz was founded by Josh Neblett in 2008 as a 21-year-old senior at Gonzaga University in Spokane. He chose to keep the business there, and it has since grown from just two employees to a sizable digital marketplace, with growing profits and revenues. Over the 12-month period ended September 2016, Etailz posted $116 million in revenue. And from 2013 to 2015, sales grew from $27 million to $93 million.

Operating income also has grown, rising from $800,000 to $3.4 million between 2013 and 2015.

The company made the Inc. 5000 list of the fastest growing companies four years in a row, and also ranked 57th on the GeekWire 200, a list of the top privately-held tech companies in the Pacific Northwest.

Neblett originally planned to become a financial advisor, but decided to take a swing at entrepreneurship during his last year at school. He worked closely with Spokane investor Tom Simpson — who also happened to be Neblett’s entrepreneurship professor at Gonzaga — to get the concept of Etailz off the ground.

“We adhere to a strict bootstrap mentality, are focused on profitability and plan to build the company for the long-term,” Neblett told GeekWire in a 2012 interview. The company raised a small amount of angel investment — about $1.56 million in funding — to fuel the business, but it largely grew through its own profits.

We’ve reached out to the company to get more details, and we’ll update this post as we hear more. A conference call is slated for Tuesday morning.

etailz CEO Josh Neblett.
Etailz CEO Josh Neblett.

Etailz was originally founded as GreenCupboards.com, an eco-friendly product marketplace. It changed its name to Etailz after acquiring Ecomom in 2013, and has expanded to offer five niche retail sites: greencupboards.com, an eco-friendly retailer; ecomom.com, selling family-oriented eco-friendly products; coybeauty.com, a beauty product retailer; everycasa.com, a home product retailer; and vaultelectronics.com, an electronics retailer.

The company also provides consulting and proprietary software for companies in the online marketplace and e-commerce arenas, and is one of the top ten retailers on the Amazon Marketplace.

Trans World Entertainment is a New York-based entertainment conglomerate, which operates CD, DVD, and Blueray retail locations across the U.S. under the For Your Entertainment and Suncoast brands. The company’s stock rose over 8 percent to $3.72 per share in after-hours trading on Monday following the announcement.

According to the release, Trans World paid $36.2 million in cash and issued 5.7 million shares of TWMC stock to Etailz shareholders (valued at $19.6 million based on the closing stock price on October 14). It also assumed liability of Etailz $4.2 million employee retention bonus plan, of which $1.9 million was paid at closing. An earn-out of up to $14.6 million will be payable in 2018 and 2019, provided that Etailz achieves $6 million in operating income in 2017 and $7.5 million in 2018.

Etailz headquarters will remain in Spokane and all of its management team with “digital marketplace expertise” will stay on board, according to the release.

“We look forward to accessing the relationships, operational expertise and infrastructure they have built to help unlock the full potential of Etailz and accelerating our progress towards being the industry leader for digital marketplace sales and expertise, Neblett said in the release.

Previously on GeekWire: How Etailz CEO Josh Neblett turned a college business plan into a $100M business — in Spokane

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