Manufacturers $26 Million in Funding

We got word yesterday that scored $26 million in a round led by Fidelity Ventures and Fidelity Asia ventures. Even though it seems there are fewer funding deals happening in the sector, this round is further proof that some ventures are still getting dollars. In some cases, big dollars. What made interesting enough for Fidelity to take such a plunge? We reckon that investors are tired of traditional enterprise software and SaaS deals. Instead, they're looking for new business models that leverage not only technology, but advertising and content as well. Certainly, Fidelity is banking on the fact has the opportunity to be the next Alibaba in China and beyond as well.

In our office, we've used both Alibaba and on global sourcing projects -- in some cases, the same project -- and found more useful for identifying suppliers which are more appropriate for industrial products sourcing. In general, it's been our observation that's built-in sourcing capabilities are excellent for build-to-print parts compared with traditional vendors in the space without a direct material orientation, though's existing end-to-end sourcing capability is rudimentary compared with the traditional vendors. Alibaba's global sourcing capabilities, in contrast, serve as more of a type of Chinese business yellow pages where it's hard to distinguish manufacturers from trading houses. Still, given the increasing challenges and costs with China sourcing of late, will have to look to new markets -- or focus more on serving the Chinese market domestically -- if it is to grow into the type of multiple and valuation that its investors are no doubt expecting.

- Jason Busch and Lisa Reisman

Just a quick postscript to our original post ... I find it absurd how some blogs like Techcrunch with no knowledge of a core business draw comparisons such as Alibaba and without exploring the details or interviewing experts. It's sensational, shoddy journalism -- not even blogging. If they bothered to pick up the phone and call me, Lisa, Michael Lamoureaux, Mickey North Rizza, Debbie Wilson or another expert in the space, they'd realize that comparisons to Alibaba are misleading and that what could become is much different indeed. Simply eating a vendor interview hook, line and sinker is something I expect from Purchasing -- not other bloggers breaking news and covering the sector. Seriously, guys. You've got a responsibility here as bloggers breaking news. Pick up the phone or reach out to your network to get an informed expert opinion. - Jason

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