MFG.com Secures $26 Million in Round A Venture Capital Investment

Atlanta-based MFG.com Inc., an online marketplace partly owned by Amazon.com Inc. recently announced it has raised $26 million in venture funding.

The funding, the company’s first round of venture capital, was led by Fidelity Ventures. MFG.com. MFG’s CEO Mitch Free said that the investment will help the company develop new technology, hire executives and expand into Asia. The investment, he said, will essentially help MFG.com transition from entrepreneurial phase to growth stage.

Fidelity Ventures of Boston and Fidelity Asia Ventures of Hong Kong led the investment, with participation from existing investor European Founders Fund of Munich.

Bezos Expeditions LLC, the investment fund of Amazon.com Inc. founder Jeff Bezos, is also a stakeholder in the company but did not participate in the latest financing. Bezos Expeditions and European Founders Fund invested an undisclosed amount of money in MFG in February 2007.

MFG operates one of the largest global online marketplaces for manufacturing suppliers and buyers to do business. The company’s platform matches up buyers and sellers of manufacturing services and industrial products, connecting the two parties while crossing geographical or technological barriers. Buyers can use the site for free, while sellers pay an annual subscription that averages about $6,000.

MFG plans to use its new capital to ramp up its global expansion and begin offering its services in a host of new markets, said CEO Mitch Free.

“We started in North America and have operations in China, but we still have some places we still need to go such as Eastern Europe, Japan, India and some other parts of Asia.” Free said. Free added that the contacts and advice Fidelity can provide in Asia were pivotal to the company choosing it as an investor.

“We were not at all looking for funding,” says Free. “But the more I learned about Fidelity and their knowledge of the Asian market; I realized that Fidelity had a lot of strategic value, which is what led us to select them.”

Larry Cheng, a partner at Fidelity and new board member, said his firm decided to back MFG because of “pattern recognition.” Cheng said: “It reminds us of one of our other portfolio companies – Alibaba”. “The manufacturing industry is one of the world’s largest vertical markets and represents a high potential market for a B-to-B marketplace because of its size, inherent globalization and fragmentation,” added Cheng who currently serves on the boards of Prosper, eCredit, mindSHIFT Technologies and as a board observer on The New Orleans Exchange. “MFG.com has demonstrated strong historical growth and built a world-class platform that we are confident positions them to further capitalize on the converging trends that are transforming the manufacturing industry: accelerated globalization and increased Internet utilization.”

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