When the West Coast pays attention to a St. Louis tech startup, it’s often to buy the company or snatch away its headquarters.
Hatchbuck, an 8-year-old provider of marketing software, has written a new twist on that story. It is growing and merging with a California firm, but the combined company’s top decision makers will remain in Hatchbuck’s Kirkwood office.
“St. Louisans are accustomed to seeing mergers not go our way,” says Cliff Holekamp, a partner in Cultivation Capital and a Hatchbuck board member. “It’s exciting to see a merger where the leadership is going to stay in St. Louis.”
Hatchbuck is merging with Benchmark Email, which sells email marketing software. Benchmark was the bigger of the two, so its name will go on the combined company, but Jonathan Herrick, Hatchbuck’s co-founder and chief executive, will run the show.
The company is keeping Benchmark’s office in Los Alamitos, a suburb of Los Angeles, along with its sales force in 15 countries. The international reach is new for Hatchbuck, which had concentrated on the U.S. market.
The merged firm has 130 employees, up from about 20 at Hatchbuck previously. Herrick said the company expects to add staff in Kirkwood.
Hatchbuck was founded in 2011 by Don Breckenridge Jr. and Herrick, who had worked together at recruiting software firm Sendouts. It was an early tenant of the original T-Rex incubator in downtown’s Railway Exchange Building.
Herrick said the atmosphere here for early-stage companies changed greatly between the early days of Sendouts, founded in Clayton in 1999, and the launch of Hatchbuck.
“We had grown Sendouts in a vacuum; there were not a lot of software companies in St. Louis,” he said. “This time, we were downtown and had a chance to mentor and connect with other software companies. The ecosystem definitely played a role in supporting us.”
Hatchbuck moved to Kirkwood last year and Herrick succeeded Breckenridge, who remains a board member, as CEO in January.
His next challenge is integrating the Benchmark and Hatchbuck products into a single system that combines email marketing and customer relationship management. The company says that will happen by 2021; it’s supporting both brands in the meantime.
The combination is a natural one: Email is one of the most common ways businesses contact their customers, so it needs to be integrated with an overall marketing system. Hatchbuck included email marketing functionality from the start, Herrick said, but the merger gives it a better email product and much greater scale.
He expects the new company to undergo “exponential” growth following the Benchmark deal, and says that could include more mergers or acquisitions. Despite some studies saying that St. Louis faces a shortage of technology workers, Herrick gets plenty of applications every time he needs to fill a job.
“What I’ve found, from a sales and support perspective, St. Louis is a great place to build a tech company,” he said.
As an investor, Holekamp is excited about Benchmark’s growth prospects. As a St. Louisan, he’s glad to see the former Hatchbuck stay close to its roots.
“We’re really excited for this company and how the merger has elevated their standing in the marketplace,” he said. “It’s a testament to Jonathan’s leadership that a successful company saw folding into Hatchbuck as a good opportunity.”