American Express and business-to-business (B2B) marketplace developer Ventro have teamed up to develop an ebusiness that supplies business products and services online.
The venture, called MarketMile, will provide companies with office and industrial supplies, and computers and peripherals, along with business services such as temporary labour. MarketMile will focus initially on mid-sized companies but plans to target large and small operations in the near future.
American Express will invest $17m in the venture, and Ventro $9m. The companies expect to raise another $15m to $30m from outside investors by the end of the year. American Express will initially have a 65 per cent stake in MarketMile, and 35 per cent will go to Ventro.
Ed Gilligan, group president of global corporate services at American Express, said the company intends to deliver an efficient marketplace that can scale up to handle the demand of its diverse corporate customer base and B2B supplier network.
Ventro has a "proven track record in taking ownership of the entire marketplace experience for both buyers and sellers", he added.
MarketMile, which will be launched in the first quarter of next year, will provide supply chain efficiencies and competitive prices, according to Ventro.
The companies said the benefits of the alliance to buyers include automated purchasing and payment functionality, increased productivity, and procurement tools such as workflows and consortia buying programs. The benefits to suppliers include reduced merchandising costs, and highly targeted marketing and advertising, the companies said.
Ventro, which licenses software from more than 40 vendors in building marketplaces, will use Ariba technology as the infrastructure for MarketMile. Ariba has also worked closely in developing American Express' B2B commerce network.
Lisa Williams, an analyst at The Yankee Group, said MarketMile will try to corner the general business products and services market worldwide, which is estimated to be worth more than $1.4tn.
MarketMile will be based near Ventro's headquarters in Silicon Valley, and Ventro's John Corsi will serve as interim chief executive of the new company.
MarketMile is the sixth operating company for Ventro. Other Ventro companies include Chemdex, Promedix, Broadlane, Industria Solutions and Amphire Solutions.
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