The spotlight is on the burgeoning business-to-business
industry, and venture capitalists are lining up to fund its growth.
Just today, NeoCarta
Ventures, the latest venture capitalist to enter the field, announced a
$275 million fund that will focus exclusively on Internet commerce. The firm
plans to invest in business-to-business companies, as well as
The announcement follows several other high-profile venture funds created to
focus on the online business-to-business market, which is slated to garner
the majority of revenue generated through e-commerce. Forrester Research
estimates that the business-to-business industry will explode to $1.52
trillion in 2003 from about $131 billion in 1999.
Just last month, CMGI launched
its CMGI @Ventures B2B Fund, separating it from its @Venture fund to
highlight successes in this sector. Also recently, a start-up fund
based in Washington, D.C, Venturehouse Group, said it would focus
exclusively on the online business market.
NeoCarta Ventures--based in Cambridge, Mass., and San Francisco--will be led
by managing directors Jarrett Collins and Karin Kissane, who were previously
principals of TTC Ventures, the venture capital arm of The Thomson
Corporation. The fund also will be led by Thomas Naughton and Tony Pantuso,
who were formerly vice presidents at GE Equity, a private equity subsidiary
of General Electric Capital.
The fund's principals plan to leverage the expertise of its key
partners, including senior executives at Healtheon/WebMD. They also plan to
work with the fund's Internet Commerce Advisory Group, which includes
representatives from Microsoft and PlanetRx.
Venture-backed funding has been climbing to record levels, with Internet and
technology funding winning the bulk of the capital. According to a study by
PricewaterhouseCoopers, venture funding surged to a record $9.04 billion in
the third quarter of 1999.
Companies currently in NeoCarta Ventures' portfolio include Fibermarket.com,
Freshnex.com and Vitessa, among others.