|Description||dynamic online marketplace|
|Venture Round, 12/05 |
Blue Water Capital
|Series A, 1/12 |
Revolution Growth Fund
FedBid, Inc. operates the fully managed FedBid® online marketplace, revolutionizing how the government and businesses buy. By creating a new world of ‘FedBid-able’ buying, where the principles of opportunity, transparency and competition prevail, FedBid empowers and energizes its customers, giving them the confidence to take control of the buying process and freeing them up to focus on moving their organization forward.
FedBid was founded in 1999 as a division of privately-owned Procurement Technologies, Inc. of Gaithersburg, Maryland and initially raised more than $5 million in equity funding (Garage.com, Harvard Investment Group, Sun Capital Partners and other equity funds) to launch the FedBid website. The idea came to Phil Fuster (a FedBid founder) when he became frustrated with the process of bidding on an RFQ. The company ceased operations in December 2000 when it could not secure a second round of financing. In 2001, the FedBid online marketplace reopened under the ownership of Advance Technology, Inc., which changed its name to FedBid, Inc. in 2004. The new FedBid expanded the focus of its online marketplace from U.S. Federal Government commercial purchase card orders to purchase order (PO) transactions for bigger purchases of commercial items, including commodity-type goods and simple services.
According to company officials, transaction volume through FedBid grew from $31 million in 2003 to $94 million in 2004 and $204 million in 2005. In 2007, FedBid was awarded a business method patent (7,272,579) for its Auction Based Procurement System. US 7272579 In October 2009, FedBid announced $875 million purchases were conducted though its site in FY2009, which reflected a 20% increase over FY2008. In FY2010, the company reported that $1.15 billion worth of purchases through FedBid, reflecting a 30% increase over FY2009 and a 50% increase over FY2008. Most recently, in FY2011 $1.4 billion worth of goods and services were conducted on FedBid, with nearly $950 million in contracts going to U.S. small business Sellers.
Since 1998, Buyers purchasing through FedBid have achieved over $461 million in savings on over $4.1 billion in goods and services, including over $3 billion in awards to US small businesses.
A December 2010 study released by the Reverse Auction Research Center found that the reverse auction services provided by FedBid for the U.S. Customs and Border Protection bureau saved the agency roughly 10 percent annually over a four-year period on more than $500 million in purchases made on the site. Over 90% of the agency acquisition professionals surveyed gave the reverse auction marketplace positive reviews, citing lower acquisition costs, greater competition and a more streamlined buying process.
In January 2012, FedBid won a major investment from the newly-launched (December 2011) Revolution Growth fund. Headed by Steve Case, Ted Leonsis and Donn Davis, Revolution Growth is now the largest investor in FedBid. As part of the agreement, Leonsis was named Chairman of the Board of FedBid. In addition, at that time, FedBid named General George Casey, the former Chief of Staff of the U.S. Army, and Mark Walsh, co-founder and CEO of GeniusRocket and former CEO of VerticalNet to FedBid’s Board of Directors, which also includes Kim Cooke, Founder and Managing Director of Blue Water Capital.
Originally created to respond to Federal Government purchasing needs, FedBid has expanded its reach to include state and local government and commercial markets, with an official announcement of greater market and product expansion expected in fall 2012.
FedBid offers a fully-managed, reverse auction marketplace where government and commercial Buyers (anyone in a position to purchase) post purchasing needs and then Sellers those of commodity products and simple services are sourced by FedBid market operations specialists to bid on those needs.
While bidding, Sellers cannot see other bidders’ prices but can tell whether they have the leading (i.e. lowest) bid in the auction, and they can improve their bid if not. Buyers can select any or none of the bids offered, and they can cancel or repost the auction at any time. Buyers are not charged, and the winning Seller is assessed a 0-3% transaction fee that is automatically built into the bidding process.
This entire process is supported by the FedBid market and account operations teams, who work to ensure a large number of qualified Sellers are introduced to each bidding opportunity, thereby creating ample competition to savings for each buy.
A study released by the Reverse Auction Research Center in December 2010 found that the reverse auction services provided by FedBid for the U.S. Customs and Border Protection bureau saved the agency roughly 10 percent annually over the past four years on more than $500 million in purchases made through the site. More than 90 percent of the acquisition professionals surveyed at the agency gave the reverse auction marketplace positive reviews, citing lower acquisition costs, greater competition and a more streamlined buying process.
The FedBid online marketplace includes over 50,000 Sellers serving thousands of FedBid Buyers including Kelloggs, the American Red Cross, the Departments of the Air Force, Army, Commerce, Defense, Energy, Health and Human Services, Homeland Security, Interior, Justice, Labor, Navy, State, Transportation, Treasury and Veteran Affairs.
In 2011, Buyers awarded over 20,000 contracts of which more than 80% went to small businesses.
FedBid is committed to responsible and forward looking corporate citizenship. CEO and Founder Ali Saadat and Board Chairman both believe that companies do well by doing good and have made it a priority to manage the company’s double bottom line.
To fulfill its commitment, the company has engaged in partnerships with other organizations to improve local communities and the lives of the people within those communities.
The company’s current philanthropic efforts focus on family and children and have led to active partnerships with the Clemyjontri Park Foundation and the Military Children’s Education Coalition.