CafePress, the company that allows customers to design, buy and sell merchandise including t-shirts, hats, bags, mugs, stickers, and more, has entered into an agreement to acquire customized clothing seller Logo’d Softwear, Inc. The acquisition, which was noted in an amendment recently filed to CafePress, Inc.’s S-1, states that the agreement allows CafePress to purchase all the assets of Logo’d for $8.3 million, with $7.5 million in cash and $800,000 in shares of common stock.

Launched in 1999, CafePress filed its IPO papers back in June 2011. Last week, the company provided more details about its plans. CafePress took in $175.5 million in revenue last year, up 37% from $127.9 million in 2010.

4.5 million shares (2.5M from the company and 2M from selling shareholders) will be made available for $16-$18 each, raising between $72 million and $81 million. CafePress says it expects to receive about $36.7 million, after costs, which it plans to use for working capital and capital expenditures.

The company is now in an SEC quiet period, so it cannot comment on the details of the planned acquisition at this time. However, the amendment notes that the company expects to close the acquisition during the second quarter of 2012.

For background, Logo’d Softwear Inc. is the 17-year old company behind custom sportswear outlet LogoSportwear.com, as well as team uniform printers TeamSportswear.com, school apparel site Custom School Sportswear and a t-shirt print shop Custom T-Shirts Printed.

To date, nearly 4 million designs have been created online at the company’s properties. Like CafePress, Logo’d allows users to set up their own Share and Sell stores with zero cost and inventory management – it’s all print-on-demand.

CafePress currently has print productions facilities in Louisville, Kentucky, as well as in Portland, Oregon as a result of its acquisition of Canvas On Demand, LLC, and Raleigh, N.C., as a result of acquiring L&S Ventures, Inc. When and if the Logo’d deal completes, the company will be able to add additional facilities in Connecticut.

The key details from the S-1 read as follows:

Cafepress, which launched in 1999, essentially crowdsources designs from its community and allows users to sell these designs on products. Users can customize and design their own stickers, coffee mugs, and other tchotchkes and Cafepress will they manufacture them for you on a one off basis. In 2010, Cafepress had 2 million customers, 2.7 million orders, with the average order size around $47. The site currently has 325 million unique products offered for sale.

In terms of financials, Cafepress posted $128 million in revenue in 2010 and $2.7 million in profits. But if you take a closer look at Cafepress’ financials in the last 5 years, they were almost the same as in 2008, then the company got hit by the economic downturn in 2009. In 2008, revenues were as high as $120 million but dropped to $103 million the next year.

The filing says revenues were down in 2009 and 2010 because it was aggressively focused on order and customer growth, which included increasing sales and marketing expenses as well as acquisitions.

Sales seem to be climbing back up; the company posted $32 million in revenue in Q1 2011, but it is back in the red with a $831,000 loss.

In the filing, Cafepress says: A key differentiator of our business model is our ability to profitably produce customized merchandise in small quantities on a when-ordered basis. So, the company isn’t operating a booming business, but it’s pretty decent considering that transactions are so small and in such small volumes, considering the customized nature of the products being sold.

Right now, CafePress is a $127 million business, and it’s got some growth ahead of it obviously. But is it ever going to be a $1 billion business?

How do you win? Just send an email to iphonewinner@cafepress.com within the next 24 hours. They will pick 100 random winners from emails received – only one email per email address – duplicates will be deleted. Include your mailing address. Cafepress will not spam you after this.

Good luck, and if you ever spot Abe, tell him I’m still interested in buying his lawnmower.

We discuss a lot of wacky ideas in the CrunchGear chat room every single day. Most of the time, though, these ideas come to nothing and we just get on with being mildly informative. Not today! Presenting, um, a t-shirt we designed! It’s on CafePress, because that’s all we know how to use.

We here know that the jailbreaking movement is alive and well, and that many of you are avid supporters of the whole movement… how else to install GV Mobile on your iPhone? This shirt, featuring the famous “pineapple escaping” logo from one of those jailbreaking apps, is something we whipped up in the chat room last week. (There’s a lot of idle nonsense in the chat room, as you might expect.) And if this goes well, maybe we’ll look into putting some of our other ideas to paper or cotton or whatever.

Zazzle, the site that lets you custom-design and sell everything from T-shirts and sneakers to postage stamps and skateboards, is launching localized sites and offerings in Australia and Canada. The company has also expanded its existing UK site, which was launched in late 2008, to the greater European market by accepting payments in Euros. And for pet-friendly users, Zazzle has unveiled a line of custom dog apparel, letting sellers put the same designs on items for both dogs and humans.

Zazzle allows anyone the opportunity to become product designers and to earn money by selling designs on a variety of items displayed in custom store fronts, free of charge to the seller. Designs and images can be screen printed or embroidered on items. Sellers earn royalties from the sale of products they design and can also allow consumers to further customize their creations.

The design site has also unveiled a suite of new “seller-friendly” tools to spice up sellers’ offerings. Sellers can now uber-customize their online storefronts, creating a branded destination for their products. Sellers can also enable a a filtering mechanism to specify which designs can be featured in different products in various colors. Additionally, Zazzle has implemented a Flash-powered bulk image upload tool that is compatible with Macs and PCs.

It’s good to see that Zazzle is growing by expanding its reach and offerings. Earlier this year, the startup underwent a round of layoffs, letting 15% of the company’s staff go due to the sluggish economy. Competitors include CafePress and Spreadshirt, which both have an international presence.

The company also lets private individuals and commercial organizations set up their own online merchandising outlets as resellers of the Spreadshirt service.

Spreadshirt says the financing will be used to develop its online platform and its push into the North American market, where its two main competitors, venture-backed CafePress (Foster City, CA) and Zazzle (Redwood City, CA) are based.

According to a January company blog post, 1 million t-shirts were sold in 2008 via Spreadshirt. They’re also open about the missed growth estimates put forward at the end of 2007: growth was at 40% for the year instead of the aimed-for 50-80%. As a result, the company was recently forced to do a round of lay-offs and reorganize some of its departments.

(Source: Deutsche Startups)

Launched in 1999, CafePress enables its users to design, buy and sell expressive merchandise such as t-shirts, hats, bags, mugs, bumper stickers and the likes. CafePress handles the merchandising process and returns a cut of the revenue from sold inventory to its users. The company boasts serving a network of over 6.5 million members trading 150 million+ products, and also claims to receive 11 million unique visitors per month on average.

CafePress even made its first acquisition last Summer, and a significant one at that, buying Imagekind for $15-$20 million in cash and stock. The company has recently announced plans to expand internationally by taking its marketplaces to other English speaking nations like the UK, Canada and Australia.

CafePress claims to be profitable, which of course raises the question why the extra funding was needed to begin with. Most likely, the investors are providing CafePress with a safety cushion for the future consequences of the current economic downturn, as well as the necessary capital for the company to expand its base operations into even more countries.

For the sake of comparison: $28.3 million is only half of the backing that head-to-head competitor Zazzle has received to date, yet both Compete and Quantcast suggest that it receives twice as much traffic. Spreadshirt is another noteworthy player.

Update: CafePress has responded, saying that this story is incorrect:

We did not raise venture funding, nor have we raised funding from Sequoia since our series B in 2005. The Form D notice was filed with the SEC because we issued $8.29 million shares of stock back in July.

PEHub mistook a Form D notice which was filed with the SEC because CafePress issued $8.29 million shares of stock back in July.

Update 2: Dan Primack at PEHub explains what went wrong.

Update 3: Below is the SEC Reg. D filing in question, which does clearly state that the company sold $8.3 million worth of securities in July (page 3) to investors including Douglas Leone (a VC at Sequoia Capital) and OpenTable CEO Jeff Jordan. But as indicated above, this was actually an issuing of existing shares rather than a sale of new ones. The new SEC form that CafePress used does not make this clear. So much for transparency.

http://viewer.docstoc.com/
SEC Cease And Desist Order To Prosper – Get more Legal Forms

Imagekind, the art site that describes itself as “a hybrid art gallery, photo-sharing service and a print-on-demand service” has been acquired by CafePress for $15-$20 million in cash and stock, according to VentureBeat.

The site, which was launched two years ago, allows artists to upload and sell framed prints of their pieces, and also allows users to purchase one-off prints of their own images. The company’s blog post on the deal says that the site is home to over 50,000 artists, who will now gain increased exposure from CafePress’s 6.5 million members. ImageKind will continue to operate from its existing website and brand.

In January 2007 we heard rumors that Amazon was looking to acquire the company, but a deal never materialized. Instead, the company wound up raising $2.6 Million in funding in February of that year.

Cook also reports that Zazzle, one of CafePress’s largest competitors, was looking to acquire Imagekind as it moves to launch its own custom framing service. Another major player in this space is Art.com.

Heckman was most recently at Fox Interactive Media; he joined Fox when his company, Scout.com, was acquired by them in 2005 for $60 million. Heckman was also the chief negotiator at Fox in their $1 billion search deal with Google.

In other words, they made a heavyweight addition to the management team. Kleiner Perkins’ John
Doerr supposedly recruited him personally.

Heckman isn’t the only Fox Interactive exec to leave the company recently. Former SVP Corporate Development Heather Harde is now our CEO, and former Fox Interactive President Ross Levinsohn is now running a buyout fund called Velocity Investment Group with Jonathan Miller, the former Chairman and CEO of America Online.

Zazzle competes with Ponoko, Cafepress and Goodstorm, among others.

As with all of these services, they do all the hard work – producing and shipping the item, and collecting the money. All the seller has to do is market the shop, set prices and collect their share of the money.

GoodStorm was founded by Yobie Benjamin and August Capital’s Andy Rappaport in October and launched on December 14, 2005 (there are good pictures of the team at that link as well). Their business model is designed to cater specifically to nonprofits. They keep only 30% of the profits on a sale (giving the rest to the seller), and also donate a portion of profits to charity. Like I said, it’s hard not to like this company.

Currently they are working with sellers one-one-one, but will eventually launch a self service store creator.

The company is built on the Drupal open source content management system. GoodStorm says they will be donating chunks of code back to the project as well.

Stefanie Olsen at CNET wrote about Goodstorm earlier this week and has additional information.