Openlane, an Internet company that helps auction off automobiles, is just the latest old “B2B” company starting to thrive after struggling in the wake of the first Internet boom.
The company saw 60 percent growth in revenues last year, for a total of more than $60 million, and that growth is accelerating — according to its executives. So the company has just taken $25 million in financing to help maintain momentum.
Openlane is one of those early Internet “back-end” companies, serving businesses that do transactions with each other. Specifically, Openlane acts as the middle-man in selling cars that are no longer used by car rental companies, or by other companies with large leased fleets such as Ford, Chrysler and Chase Bank. Those partners use Openlane to sell cars in bulk to dealerships around the country, leaving the shipping and financing arrangements for Openlane.
This so-called “wholesale used-auto market” in the United States is around 21 million vehicles, according to Openlane’s CEO, Roger Butterwick. Of that total, Openlane has gotten about a two percent market share.
The Menlo Park, Calif.; year-over-year growth was 60 percent in 2007, Butterwick says, and the growth rate has continued rising in the first quarter of this year.
That’s a big change from a a few years ago when, after the first Internet bubble burst, fewer people trusted Internet companies to do B2B.
Another survivor that emerged in the past few years as viable businesses is MFG.com, which sources parts.
To date the company has taken seven fundings for a total of $66.5 million. That included the current $25 million round, which was led by Meritech Capital Partners, with previous investors August Capital, RPM Ventures and Zilkha Venture Partners participating. Openlane employs about 450 people.