The inevitable burst of the Internet bubble relegated many once high-flying dotcoms to the dustbin of history. Fortunately, not everyone is smarting from the increased scrutiny and skepticism of previously exuberant venture capitalists. Their renewed focus on business fundamentals rather than promising ideas paved the way for Rockville, Maryland-based B2E Markets to close its third and largest round of funding in a constricted private equity market. "In some senses we had an easier time getting funding this time than before," explains CEO Orville Bailey. "We had a fundamental and sound plan, but the business models that were more in vogue were more speculative."

B2E develops proprietary software that uses the Internet to help large corporations millions of dollars by streamlining their purchasing processes. While other companies were focused on unproven business models, B2E focuses on the sourcing methodologies that will allow companies to clearly see the benefit to their bottom line," says Anthony Gee, a partner at African American-owned venture capital firm, Carthage Partners that has invested over $3 million in the company in the past two years. New York-based Carthage one of several African American-owned firms, including SynCom and Ascend Ventures that have been bullish on B2E's chances from the start. "Black-owned companies represented at least half of this round of funding so the support that we have received from the start has been unwavering," says Bailey. CIBC Capital Partners, a Toronto venture capital firm, led B2E's latest round of $38 million.

It may not be sexy, but e-procurement is the hottest sector in the Internet- related business-to-business industry. A recent study conducted by Deloitte Consulting of over 100 corporations found that 80% of those polled cited e-procurement as critical or very important to their operations. Over 90% have implemented or plan to install an e-procurement application in the coming year. That's good news to Bailey who expects this latest round of $38 million to carry the company through profitability in the latter half of 2002.

He and co-founder Richard Waugh started B2E in 1999 with $750,000. The partners had amassed over 20 years of business experience and spearheaded the e-procurement initiatives at General Electric since 1995. Even with their business credentials and knowledge of the procurement industry, finding funding was no lay up. "In some senses we had an easier time getting funding this time than the last," explains Bailey whose second round netted $13.5 million from investors that included Accenture (formerly Andersen Consulting) and Friedman, Billings, Ramsey Technology Venture Partners. "At the time we were being encouraged to launch a mostly Internet-based model by creating and facilitating a marketplace for goods and services," he adds.

The good news is that we B2E stuck to the fundamentals and the private equity market eventually wised up. Fortunately, Bailey and co-founder Richard Waugh, stuck to what they knew. "We provide a solution that enables companies to be much more effective in devising purchasing strategies and executing total cost agreements." Companies will always need goods and services and looking for the cheapest way to purchase them just makes good business sense. It may not be as exciting as other consumer-focused sites but it is a much more stable industry and the business model makes sense- and dollars. Even in a tight market reliable business models and sound management can attract dollars