When Walter Buckley and Kenneth Fox founded Internet Capital Group Inc. (ICG) in 1996, business-to-business E-commerce was in its infancy.
Just three years later, the holding company, based here, provides capital and operational support to more than 45 E-business players and has hired away two top channel guns, former Tech Data Corp. president and chief operating officer Tony Ibarguen and former Microsoft Corp. channel specialist Sam Jadallah.
Adding fuel to the fire, ICG's stock has jumped more than tenfold since hitting the market in August, closing on Dec. 6 at $163.31.
So who are these guys?
While working at Safeguard Scientifics Inc., which invests in mostly young high-tech ventures, Buckley and Fox came up with a new business model focused on investing in and supporting start-up E-commerce companies focused on the business-to-business market.
Less than a year after founding ICG, the company closed an initial $40 million financing round with Safeguard, which also shares office space with ICG, along with Compaq Computer Corp. and Comcast Corp.
"A core component of our ability to accelerate our clients' growth is a series of managed services we provide relating to technology, recruiting, strategy, research, finance and, soon to be, marketing," said Fox.
Although ICG has posted relatively modest sales this year ($14.8-million for the nine months) and reported a loss of $6.4 million in the same period, the company's market value surged to an astounding $20.6 billion last week.
But some research and analyst firms say the company's stock is overvalued. Bill Mann, an analyst at The Motley Fool Inc., Alexandria, Va., said the company will need to look to additional equity sales to raise additional funds.
"The company may in the end prove that it deserved its market cap, but right now it is valued very richly on a series of unproven concepts manifested in small, unprofitable companies run by unproven management teams," Mann said.
ICG's list of partner companies keeps growing. Clients include Seattle-based business-to-business Internet reseller Onvia.com Inc.; Austin, Texas-based
E-commerce software provider ClearCommerce Corp.; and Web integrators US Interactive Inc., King of Prussia, Pa., and Breakaway Solutions Inc., Boston.
"ICG was setting themselves just to invest in Internet companies, so I thought there was value in taking money from a company with that sole focus," said Robert Lynch, chief executive and president of ClearCommerce. "They have also been helpful to me in finding job candidates. They have been helpful on the technology, as well as on the financial side."
When inking deals with Web integrators, ICG looks for companies capable of offering scalable, industrial-strength business solutions and for high-caliber management teams, Fox said.
Two weeks ago, ICG acquired an interest in USgift.com Corp., a company using the Web to connect gift, garden and home retailers.
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