FreeMarkets: From Early Backing to Breakout IPO

At Ben Franklin Technology Center (now Innovation Works), the role was managing an approximately $6M early-stage investment portfolio. The mandate was to identify early-stage companies that could grow into real businesses and to back them with state capital structured like venture money. FreeMarkets was one of those companies.

The backing came through a Challenge Grant from that portfolio. At the time, FreeMarkets was building a model for online competitive bidding for procurement of intermediate market goods, a category that had not yet been proven at scale. The question was whether the model would work in practice, with paying clients and live procurement spend.

Brendan joined FreeMarkets directly as employee #27.

Brendan helped lead one of the first two or three Competitive Bidding Events (CBE) FreeMarkets ever ran. The event was a Carrier Corporation sourcing engagement covering approximately $20M in parts.

The CBE was simple in concept. The hard work was supplier qualification: a dedicated FreeMarkets team recruited new bidders and audited their operations before any auction ran. The result was a supplier pool the buyer could not have assembled internally. In legacy procurement, contracts often went to incumbents on the strength of the relationship rather than on what they actually delivered. The CBE replaced that with price and specification. The Carrier event produced $2M in savings in a single afternoon, more than 10% of the sourcing spend.

The Carrier event was the first sizable proof that the model worked. By the time of the IPO, FreeMarkets had repeated the pattern across UTC's other divisions and a growing list of industrial buyers.

FreeMarkets went public on December 10, 1999, with shares closing more than 440% above the offering price. At the time, it was the fourth largest single-day gain in IPO history. The company had built a working model in a category it had largely created.

The company continued to grow after the IPO. By the time Ariba acquired FreeMarkets in 2004, the combined organization had reached approximately 1,400 employees.

FreeMarkets captures a pattern that repeats in Brendan's later work. He approached the company first as an investor at Ben Franklin, then as an operator inside FreeMarkets. The throughline across his career is building commercial systems from inside companies that need them.