Buyingedge.com, a company that is attempting to shake up the world of online auctions, has gotten a vote of confidence from one of the Internet’s biggest kingmakers.
On Thursday, buyingedge.com, which is a subsidiary of enterprise software developer Information Management Associates (Nasdaq: IMAA), announced that it has completed a $10 million (US$) round of financing. The funding represents approximately 29 percent of buyingedge.com’s equity.
The round of private preferred stock financing was led by a $7.5 million stake from @Ventures, the venture capital arm of Internet incubator CMGI (Nasdaq: CMGI). Other investors include Wand Partners, which is committing $2 million. Amicus Capital and Madrona Investment Group have committed to a combined $500,000. Brad Garlinghouse, general partner with @Ventures, and Eric Jeck of Wand Partners will both be directors on the buyingedge.com board.
Buyers Dictate Auctions
Buyingedge.com bills itself as a reverse auction company. The company is innovating online auctions much in the same way Priceline.com and Mercata have innovated their respective markets. Buyingedge.com allows buyers to dictate the negotiations in auctions.
Buyingedge.com’s online marketplace gives customers the ability to review competitive bids and negotiate for the lowest prices with more than 4,000 vendors of goods and services. Membership is free for buyers, and, unlike Priceline, buyers are not required to name a certain price and commit to making a purchase . On buyingedge.com, buyers can decide not to make a transaction.
Buyingedge.com Gaining Momentum
Buyingedge.com launched six weeks ago, and the site has already 20,000 registered buyers. Product categories include office equipment, consumer electronics, musical instruments, and sports and fitness.
“The mission of buyingedge.com is to empower individual consumers by introducing them to a universe of merchants that are both on and off the Web,” said Gary Martino, chairman of the board for Information Management Associates and CEO of buyingedge.com. “With this infusion of funds, we have the power to move buyingedge.com forward as the market leader in the buyer-centric e-commerce marketplace.”
The $10 million in financing will be used as working capital for technology development, business development and marketing. Buyingedge.com will also use the new funding to move from Shelton, Connecticut to Redwood Shores, California.