IngredientsNet.com, the e-procurement solution voted the “hottest start up company” by Tornado-Insider.com just a few months ago, has announced it is to suspend website page. CEO Tom Galvin referred to the vain search for further investment to allow IngredientsNet.com to build on a steady start.
A negative capital environment has proved the downfall of any number of Internet startup companies. IngredientsNet.com was founded by Irish agribusiness groups Fyffes and Glanbia and commenced trading in August 2000. The company won the Eircom Business Awards 2000 and had established small offices in Germany, the UK and the US, as well as Ireland.
Galvin said that the processes and technology used by IngredientsNet.com had worked extremely well, with high satisfaction levels among current users and good uptake among major international food companies. “However the company has significant capital requirements to progress to profitability, which it was originally anticipated would be sourced from external investors,” he said. “With this capital currently unavailable, regrettably the decision was taken to suspend operations.”
Industry onlookers said the writing was on the wall for IngredientsNet.com once Fyffes announced earlier this year that it was putting the development of its own fruit portal Worldoffruit.com on ice and writing off its €15.6m (US$13.4m)investment in the company. It is estimated that IngredientsNet.com required new investment of about US$10m to take the business forward, at a time when even far smaller investment capital is extremely difficult to secure given the lack of interest in the dotcom sector.
Ingredientsnet.com was a web-based B2B marketplace which manufacturers used to trade dairy ingredients, flour, sugar, edible oils and fats. While Fyffes and Glanbia each invested US$2.5m in startup capital in March 2000, the business plan always saw further investment coming from external sources.