ICG Invests $450M in Instant Financing Firm

The Internet Capital Group (ICG) announced Thursday that it has agreed to acquire an interest in eCredit.com for $450 million (US$) worth of ICG common stock. ICG has investments in 29 companies that provide a variety of business-to-business (B2B) services.

eCredit.com operates its Global Financial Network to connect businesses that need trade financing to financing sources in order to permit real-time, point-of-sale credit and financing decisions.

The company provides its customers with a series of tools that purportedly make it easy for businesses and financing firms to make real-time credit decisions. The tools include:

• InfoLink, which connects to major credit bureaus and information sources such as Dun & Bradstreet, Experian, Trans Union, Equifax, and EDGAR.
• DecisionDesktop, which purportedly “streamlines the underwriting process, providing in-depth financial analysis,” and offers “decision support for a full range of underwriting scenarios.”
• InstantDecision, which the company claims “automates the end-to-end underwriting process, including information access, scoring, decisioning and generation of necessary documents.”

ICG says that its investment in eCredit.com, a privately-held company based in Dedham, Massachusetts, is one of its largest capital and strategic partnerships to date.

Financial Organizations Eyeing B2B Networks

ICG’s investment is indicative of the growing trend of financial organizations developing close relationships with B2B trading networks. Earlier this week, financial giants Citigroup, Inc. and Deutsche Bank AG struck deals to become major financing partners in B2B networks.

Citibank aligned itself with Commerce One’s MarketSite trading portal, while Deutsche Bank established a relationship as the preferred financing partner for ERP software giant SAP AG.

Tools for Rapid Decisions

eCredit.com cannot be compared to financial giants like Citigroup or Deutsche Bank. It is a small, privately-held company that has developed a series of tools to allow companies to find out credit-based information and then make rapid decisions about creditworthiness.

Its business plan is to provide those tools to financial institutions that want to do business with companies that operate online, but do not have the procedures in place to make the instantaneous decisions required to provide financing. It also plans to allow companies that trade online to access credit-based information on trading partners to make rapid decisions on extending credit to potential trading partners.