Reuters Aug 29 – SAN FRANCISCO In a big bet on marketplaces, venture capital firm Greylock Partners is promoting former eBay Motors founder Simon Rothman to partner, and dedicating $100 million to the sector.
Marketplaces – companies like auction service eBay, accommodation service Airbnb, and personal-loan service LendingClub – have the potential to create more billion-dollar businesses in the next five years than in the last 20, Rothman said in an interview with Reuters.
Unlike vendors, marketplaces do not hold inventory themselves but connect the sellers who have it with the buyers who want it. Innovations like the rise of smartphones, which make it easy for customers to jump online anytime to do business, are fueling marketplace businesses, Rothman said.
And unlike traditional businesses, where growth can create logistical problems, online marketplaces scale well.
“When they get bigger, they get stronger,” he said.
Silicon Valley-based Greylock has invested in several networked-marketplace companies, including Airbnb, ride-sharing service Lyft, and shopping service Wanelo.
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