Raises $26 Million From Fidelity Ventures, Goes After Alibaba

mfgcom-logo.pngMitch Free has a knack for attracting high-profile investors to his manufacturing marketplace, First, Jeff Bezos convinced Free to back out of a previous agreement to sell the company and personally invested $14 million in September, 2005. Then Bezos put in some more money along with the German Samwer brothers (who founded Alando, Jamba, and invested in Studivz) in a $4 million round in January, 2007. Now, Free has raised another $26 million, nearly all of it from Fidelity (Fidelity Ventures and Fidelity Asia Ventures put in $25 million, the rest came from existing shareholders including the Samwers’ European Founders Fund). The big seller was founder and CEO Free, who sold a chunk of his personal shares in the company. With this funding, his stake went from a controlling 50 percent to less than 30 percent.

Never heard of You are probably not in the manufacturing industry. Founded in 2000 and based in Atlanta, is an eBay for manufacturers—a B2B marketplace for sourcing manufactured parts from all over the world. Companies as diverse as Black & Decker, Harley Davidson, NCR, and Sara Lee use the site to find suppliers for machined parts, plastic moldings, metal stampings, and fabrications.

You can find nearly $50 million worth of requests for manufacturing quotes per day on the site, complete with CAD diagrams and other specifications. Manufacturers bid on the requests. makes money by selling yearly subscriptions of several thousand dollars each to suppliers who want access to’s community of purchasing managers and engineers at buying companies (who get to use the site for for no charge). Free learned that in the manufacturing world suppliers are much more willing to pay a flat fee than to give a cut of each transaction.

Over the past year, he’s been making a big push into China and connecting the vast network of manufacturing suppliers there with corporate customers all over the world. In part, that is what attracted Fidelity Ventures, which was an early investor in Alibaba and sold its stake to Yahoo. One part of Alibaba’s business is an online B2B directory. Fidelity’s Larry Cheng, who invested in Alibaba and now will take a board seat at, told Free that he sees as an “Alibaba on steroids.” (Cheng is also a board member of P2P lender Prosper). Daniel Auerbach of Fidelity Ventures Asia will take an observer seat on’s board. Aurbach was previously an Alibaba board member.

Free has been known to talk smack about Alibaba, which recently had a successful IPO. He tells me:

The Alibaba model (directory “brochure-ware”) is not very deep but it was in step with the sophistication of the Chinese market. To truly remove inefficiencies in the manufacturing industry there has to be a platform that facilitates collaboration, transactions, negotiation, audit trails, intellectual property protection and more. has built that platform and is preparing to scale it globally.

Free plans on using’s new capital to continue expansion in the U.S., Europe, and China, as well as to ramp up in India, Japan and Eastern Europe. But he has greater aspirations for than just to break into new markets. He wants to become the “operating system for the manufacturing industry.” His acquisition in 2006 of gives him the technology and customer reach to build Web-based software for the manufacturing industry. He wants to build a platform similar to’s AppExchange for manufacturing-oriented applications. He’s already gathered the community of purchasing and factory managers who might use such software.

Another possible use for that $26 million is more acquisitions. Free has talked to me about his desire to find 3-D search technology that can operate on a commercial scale to match an engineer’s CAD diagrams with the historical inventory of parts sourced on His idea is to offer a service that would allow engineers to estimate the manufacturing costs of their designs on the fly, based on the shape and materials of the parts they need. If he ever finds such a technology, now he has the money to buy it.