Cortera aims to be a kind of "wisdom of the crowds"-driven business credit agency. CEO Jim Swift likes to describe it as "Yelp for business credit." And in the same way that the user-powered review site Yelp has taken on established players like Zagat, Cortera has Dun & Bradstreet in its sights.
Cortera has quite the interesting back-story. It was founded in 1993 as eCredit.com, long headquartered in Dedham, and sold a minority stake to Internet Capital Group in 2000 for $450 million in stock, just a couple weeks before the Nasdaq crash (you can imagine how well that worked out.)
eCredit, with 80 employees, kept on trucking. But it was still unprofitable in late 2006, when Fidelity Ventures decided to buy it and invest another $11 million. Fidelity installed Swift as CEO. Swift came with quite the pedigree: he'd earlier been a top executive at Seisint, which was acquired by LexisNexis for $775 million (the biggest acquisition of a venture-backed company in 2004.) That deal, incidentally, was all cash.
Waltham-based Battery ventures joined Fidelity in investing in Cortera, as did Garvin Hill Capital Partners.
Swift quickly ditched the eCredit name and dubbed the company Cortera. "The plan was to reinvent the business credit information space," Swift says. "Companies are still paying 'mainframe' prices in the Internet age, for limited information that's only contributed by large companies."
Swift's big idea is to take on the Dun & Bradstreet behemoth in two ways: by underpricing them, and by soliciting reviews of a company's payment history from anyone with access to the Internet.
Cortera charges $3 for an individual report; monthly subscriptions to the service start at $29. (For comparison, a limited credit report from D&B costs $40, and a full one costs $119.)
Anyone registered with the site can provide information about a business that is late (or prompt) with its payments; how large the outstanding balance is; and any other comments they may want to leave. "People can share payment experiences, and access the experiences of others," Swift says. "And for the first time, small companies will have a say in this kind of rating."
He says the site will try to deal with businesses that are unhappy about a rating they've received on Cortera in several ways. "They can contact a reviewer, report abuse, or vote whether a review is helpful or not," Swift says. "The wisdom-of-crowds approach tends to filter out the most shrill voices."
Swift says Cortera today has 100 employees, about 25 of whom are in Quincy. They focus on software development, finance, and marketing. He works out of the company's Boca Raton office.
Interestingly, some of the founders and ex-employees of eCredit have a new financial information company, CreditPointe, based in Westwood. And one of the things they do is supply their own brand of credit ratings for public companies around the world.
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About Scott Kirsner Scott Kirsner was part of the team that launched Boston.com in 1995, and has been writing a column for the Globe since 2000. His work has also appeared in Wired, Fast Company, The New York Times, BusinessWeek, Newsweek, and Variety. Scott is also the author of the books "Fans, Friends & Followers" and "Inventing the Movies," was the editor of "The Convergence Guide: Life Sciences in New England," and was a contributor to "The Good City: Writers Explore 21st Century Boston." Scott also helps organize several local events on entrepreneurship, including the Nantucket Conference and Future Forward. Here's some background on how Scott decides what to cover, and how to pitch him a story idea.
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