mondus.com, the first online business-to-business marketplace for small to medium sized companies, is currently one of Europe's hottest Internet startups, with what management consultants Bain recently called an innovative concept and a "huge potential market".
The company was founded by Alexander Straub and Rouzbeh Pirouz, two Rhodes Scholars who met in 1996 whilst studying together at Oxford University. Their business plan -- for a service where small and medium-sized companies could bid for purchase requests online -- won them an initial funding of £1m from venture-capital firm 3i, and several months later Eden Capital invested a further £7.3 in the company. Based in Oxford, mondus has now expanded into the US and Germany, with the official opening of the Hamburg office taking place in mid-November.
techTrader interviewed Alexander Straub, CEO for the US office, who was born near Frankfurt am Main, and graduated with a degree in Mechanical Engineering. At 27, he has already taken his place amongst the rising stars of the Internet industry.
Where did the idea for mondus come from?
The idea came about by seeing very successful consumer sites such as eBay and Priceline, where the degree of opportunity is relatively small. We saw the huge amount of opportunity that exists in a business-to-business base, and so are now looking at a space that covers seven million small to medium sized companies. Importance does not only lie in the idea however, it also rests in the execution and refinement of an idea.
What's the aim of the company?
Our main aim is to bring down the purchasing time that businesses spend in writing down requests for proposals. The prices will be found for the buyer without him contacting any vendors himself. On mondus.com you get the best deal: companies submit quotes for all of your purchasing needs. We treat small businesses in the same way that big businesses are treated, in a time and cost-effective way.
Why did you choose the Internet as your platform?
The Internet provides interconnectivity in all directions, for both purchasing and vending services. It would be impossible for the bidding process to take place by telephone. Mondus.com provides a forum that resembles a market place. When a buyer leaves they have achieved a successful purchase because they have met the right sellers.
Describe how mondus got its original funding.
I have always had an entrepreneur spirit in me. I saw advertised in a UK newspaper a business plan competition offering a huge amount of venture-capital to the winning contender. The experience that I had gained in investment whilst working at Goldman Sachs enabled me to put together a business plan that showed a high level of professionalism, and I was able to present it in a McKinseyan style. Other contenders such as lastminute.com had a European focus, whereas we had a strong global outreach from the start, with the intention of building a multi-billion-pound company.
Why use your service instead of, say, the Yellow Pages?
Using the Yellow Pages is a passive way of doing business. We are actively making the further steps and taking the leg-work out of the process. Mondus.com reduces the purchasing time by 80 percent, cutting it down from eight days to two minutes. We are also able to offer the best price as we have a unique way of finding the most competitive vendors.
What's the revenue model?
We charge a commission fee from the vendor of the product. This fee is calculated on the basis of the transaction volume, and is only payable on the completion of a successful sale.
What inspired you to become an entrepreneur?
It was during my time of study at Stanford in 1995, when I graduated with a Masters in Engineering. At the time I was hearing the success stories of big Internet startups like Amazon.com and Yahoo!, and that sparked off my entrepreneur spirit.
My degree definitely helped to shape me structurally. The project which we are involved in deals exclusively with small businesses, and my role as purchasing manager throughout my studies helped me to understand the needs and purchasing processes for smaller companies specifically. It is important to understand that when the Internet came, there was a total revolution in the way that businesses interact, which is the central aspect to mondus.com.
What other businesses have you been involved in?
I financed my studies whilst working at McKinsey & Company as a management consultant. Following this I moved into private investment at Goldman Sachs, and then transferred to Singapore to work as a purchasing manager for Degusa. It was during my time in purchasing that I saw clearly the hurdles that exist in business without the Internet.
What are your ambitions for mondus?
At present we are the only Internet based provider operating on this kind of a scale. Our main ambition is to keep this lead position, and expand our categories from 36 in the US and 30 in Germany and the UK, to 150 worldwide. Our ultimate goal is to cover 90 percent of the needs of products purchased. We also plan to expand internationally, and would like to become the champion of small to medium sized companies in the day to day running of their business.
Is a flotation in the works?
Yes, but only when we feel that the time is right and we have the appropriate strengths to grant the company a billion dollar valuation.
See techTrader for more technology investment news, plus quotes and research.