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After spending more than $11 million, Boston-based Swap.com acquired by Finnish startup for undisclosed amount

Posted by Scott Kirsner  September 5, 2012 08:03 AM

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When Jeff Bennett took over as CEO of a company called SwapTree in 2010, he blogged boldly about leading a "swap movement" on the web, enabling people to efficiently trade items like videogames and books with one another. Bennett raised $6 million in new funding, re-branded the company as Swap.com, and vowed to become the eBay of the category.

But the swap movement never arrived, and Swap failed to build an enduring business. Taking a 50 cent fee per swap, even over a million transactions, didn't add up to much revenue. The company also tried a freemium model, making basic swaps free and charging for add-on services like shipping assistance, but Swap simply couldn't achieve scale. The site's traffic slid from more than 200,000 visitors a month last year to barely 50,000 a month recently, according to Compete.

And back in April, a Finnish company called Netcycler, also in the swapping business, acquired Swap.com for an undisclosed amount. The acquisition wasn't announced until this week, when Netcycler sent an e-mail to former Swap.com users. The subject was, "The lights are on again at Swap.com!" Netcycler executives promised that "going forward, we are planning some exciting improvements that we will tell you more about during the fall." (Four-year old Netcycler has raised just $1.5 million in funding, according to Crunchbase, and has not yet launched in the U.S.)

Swap vacated its South End offices in April. Netcycler CEO Juha Koponen wouldn't be specific about how many Swap.com employees still work in Boston. (The company once employed 15 people.) "A small staff will continue to support Swap.com as we look to expand our presence," he wrote via e-mail. LinkedIn lists four people as still working for Swap in Boston. Bennett, the CEO, and CTO Steve Cross both left Swap.com in April.

Neither Koponen or Bennett would discuss the terms of the acquisition. Bennett and Cross are now developing a new company called Raptor Sports Properties as part of Boston-based Raptor Group Holdings. (Raptor Group CEO James Pallotta is an owner of the Boston Celtics.) According to its website, Raptor Sports Properties "provides commercialization services to sports properties around the globe, including fan management, licensing, merchandising, marketing, activation, eCommerce and sponsorship."

Swap raised more than $11 million over the course of its existence as an independent company. Among Swap's investors were former Fidelity money manager Peter Lynch and investment firm Safeguard Scientifics. The company was founded in 2004.

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Scott Kirsner was part of the team that launched Boston.com in 1995, and has been writing a column for the Globe since 2000. His work has also appeared in Wired, Fast Company, The New York Times, BusinessWeek, Newsweek, and Variety. Scott is also the author of the books "Fans, Friends & Followers" and "Inventing the Movies," was the editor of "The Convergence Guide: Life Sciences in New England," and was a contributor to "The Good City: Writers Explore 21st Century Boston." Scott also helps organize several local events on entrepreneurship, including the Nantucket Conference and Future Forward. Here's some background on how Scott decides what to cover, and how to pitch him a story idea.

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