Channel Grabber

Channel Grabber was founded in 2012 to solve a critical pain point for e-commerce retailers: the fragmentation of selling across multiple platforms. Online sellers using eBay, Amazon, Etsy, and Walmart had to toggle between separate interfaces to manage inventory, orders, and fulfillment. The company built a unified SaaS platform that consolidated all these channels into a single web application with shared back-office functions.

The business grew rapidly in its early years, but by 2014 hit a plateau. For nearly three years, growth stalled entirely. The original founders who launched the company eventually stepped back, and in 2016 shareholders made a strategic decision to bring in outside leadership.

Mike Morgan, a 50-year-old veteran of the IT sector with 25 years of experience and prior exits, was invited to assess the business. Morgan had held senior executive roles at Compaq, HP, and Sony before founding his own SaaS company (which he exited in 2016) and had extensive board experience since 2005. After evaluating Channel Grabber's potential, he joined as CEO in April 2017—not through an acquisition, but as a shareholder with options, taking on the role part-time alongside his other investments.

Morgan identified two critical gaps: the product was outdated relative to competitors, and the company was investing minimally in customer acquisition and marketing. He pursued an aggressive dual strategy:

**Product Investment:** Morgan plowed significant resources into product development. The company had two products—an older legacy platform and a newer one launched the prior year. He doubled down on the new product while winding down the legacy platform. Despite the newer product having lower average revenue per customer, all growth in the subsequent 12 months came from it.

**Demand Generation:** The company experimented extensively with marketing channels but found that "good old-fashioned digital inbound content marketing" resonated most with customers and drove qualified website traffic.

**Capital Strategy:** Rather than pursue venture equity (which would have required a proven growth story first), Morgan raised approximately $400,000 in venture debt from two sources: Creative England and Funding Circle. This capital was used to fund product and marketing investments ahead of revenue, while maintaining cash flow discipline.

By November 2018 (roughly 18 months into Morgan's tenure), Channel Grabber had:

- **800 paying customers** (up from an undisclosed baseline) - **Average customer value:** $145 per month - **Monthly recurring revenue:** $110,000 (up from $85,000 one year prior, a 33% year-on-year increase) - **Annual recurring revenue:** ~$1.3 million - **Customer acquisition cost:** Under $300 per customer (including headcount and marketing) - **Payback period:** 2-3 months - **Monthly churn:** 2.5% by customer count, just under 3% by revenue (higher on legacy product, much lower on new) - **EBITDA margin:** Marginally negative (less than -10%), but on track to reach cash flow positivity in early 2019

Morgan was transparent about the path forward: the company is not yet cash flow positive, but profitability is imminent. The team had grown to 20 people, all UK-based, though they began selling into the US market in summer 2018 using a low-touch, UK-based sales model.

Most significantly, Morgan was preparing to raise up to $3 million in growth capital at a pre-money valuation of $6-9 million USD (based on the 4-6x revenue multiple standard in the market). The company is working with a corporate finance partner (KBS) to lead outreach to potential investors and acquirers. Morgan has signaled willingness to explore acquisition offers at the stated valuation, noting that the original shareholders and angel investor are distanced from operations and would welcome a liquidity event, while he and the management team are committed to staying on and potentially relocating overseas to support growth.

The turnaround from plateau to 33% growth demonstrates the power of combining product investment with customer-focused marketing—and Morgan's willingness to use leverage judiciously to fund growth ahead of profitability.