The Resurrection of a Onetime Internet Incubator—Not!
Some folks might have felt like it was déjà vu all over again when San Diego-based IdeaEDGE announced the launch of its new online services product, called the “Socialwise Group Gifting Platform.”
In its statement Monday, IdeaEDGE said it plans to launch its Web-based Socialwise platform on Nov. 10. The company says its technology makes it easy for friends and relatives to make online contributions for a prepaid gift card to a personal site on Facebook, MySpace, and other social networks.
If the IdeaEDGE name seems familiar, it is. IdeaEDGE Ventures was founded amid considerable fanfare in early 2000 as San Diego’s answer to CMGI, the Internet investment firm based in Waltham, Mass. IdeaEDGE’s CEO, Jim Collas, also was a co-founder and managing partner of IdeaEDGE Ventures. But the reincarnated business is entirely different from its previous existence.
It can get confusing, Collas concedes. “In hindsight, it probably wasn’t a good thing because the Internet has such a long tail that people still see things from eight or nine years ago,” he says.
Times have changed, too.
In the late 1990s, CMGI was a much-admired model for venture investing in Internet startups. After its 1994 IPO, CMGI’s stock zoomed sky-high, hitting a peak market valuation of $40 billion in 2000. Then the wax melted, and its high-flying wings fell apart. Just five weeks ago, CMGI officially changed its ignominious name to ModusLink Global Solutions.
When IdeaEDGE Ventures made its debut in April 2000, the founders proclaimed its mission was to “make San Diego a new capital of Internet-related technologies.” The idea was to combine CMGI’s model for venture investing with a technology “incubator” like Idealab, another Internet business in vogue at the time.
But the San Diego venture never got very far off the ground. IdeaEDGE set out with a handful of technologies just as the implosion of the dot-com sector staggered into the telecom bust and the overall market crash of 2001.
So IdeaEDGE “was kind of in limbo for a while,” says Rick LeFaivre, another co-founder and former IdeaEDGE managing partner. LeFaivre moved to Seattle in 2004 and is now a venture partner at OVP Venture Partners
Collas says he officially shut down IdeaEDGE three or four years ago. Then he saw an opportunity to build a new business around the concept of making gift cards available to users on social networking sites. He says their online services technology integrates the $100 billion market for gift cards with the fast-growing phenomenon of online social networks.
“We’re sitting in an area that is a social networking marketplace, which people say is the last frontier,” Collas says. “Everybody has been trying to figure out how to monetize the social networking space.”
A key feature of the new system is something called the “BillMyParents” online payment system. That sounds like something most college students will appreciate, although their parents may not.
As for the company’s name, LeFaivre says Collas always liked the IdeaEDGE name and logo. So when Collas asked his former partners if they would release the name to him they said “sure.”
Collas says he officially launched the new company in August 2007. He raised about $3 million through a reverse merger with an inactive public company two months later. Shares of IdeaEDGE now trade over-the-counter under the ticker symbol IDAE.
IdeaEDGE raised another $1.2 million earlier this year through a private stock placement. The reincarnated company now has six full-time employees, two part-time executives, and several outside design teams and consultants.
It turns out IdeaEDGE also has laid plans to change its name to Socialwise to align its corporate identity with its online service. That also should eliminate some confusion over the once and future IdeaEDGE.