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IronPlanet and GovPlanet
Online sales are one thing, but big-ticket Internet transactions are quite another.
With that in mind, IronPlanet surfaced to facilitate sales of tractors, dump trucks and similar heavy products that shippers would never – and could never – leave on a customer’s front porch.
“We are middlemen connecting sellers with buyers,” said Doug Feick, senior vice president of corporate development and chief legal counsel for IronPlanet, a firm spreading its wings in Fort Worth.
Though based in Pleasanton, California, since it began in 1999, IronPlanet created a Fort Worth-based division, GovPlanet, in late 2014 that attracted new business while hiring locally. The Cowtown operation targets government surplus items and has facilitated more than 12,000 sales. Items sold include Humvees, which have fetched bids as high as $30,000.
Foreseeing customer apprehension in forking over that much money for products offered online, IronPlanet founder Reza Bundy attracted $36 million in second-round venture capital funding, primarily from Caterpillar Inc., Komatsu America International Co. and Volvo Construction Equipment. That backing helped secure the firm’s reputation and its future.
(Its initial investors were Kleiner Perkins Caufield & Byers and Accel Partners.)
All equipment is inspected before it ships to customers worldwide. With every tractor sold came more confidence in the company. Its reputation rose among would-be sellers, who gave the firm a try.
And it worked.
Since 1999, sellers from 40 countries have reached buyers in more than 100 countries through IronPlanet. About half of all items received foreign bids, and about 30 percent of items sold were exported.
Success led the firm to expand, with Fort Worth becoming its second base of operations.
“From a government perspective, it’s centralized,” said Jeffrey Holmes, senior vice president of government solutions and auction management. “It’s a good central location to be able to deal with all the different government locations around the U.S. and overseas.”
The city’s large employment pool was another draw, Holmes said.
“The work ethic of folks we have brought in to work in both government and other sectors is amazing. We find that the energy level and work ethic make Fort Worth an ideal location,” Holmes said.
GovPlanet’s first office opened on University Drive in 1999, with between 15 and 20 employees. The firm recently expanded its Fort Worth offices from 2,000 square feet to more than 11,000 square feet of leased space in the Liberty Bank building on Hulen Street.
While GovPlanet focuses on government clients, its parent company serves construction, transportation, and oil and gas sectors.
“Those are very cyclical and up and down. One may be going gangbusters, while another might not,” said Feick, noting that the turbulent oil and gas industry is struggling but transportation is accelerating due to low fuel costs.
“So more people are using trucks rather than intermodal,” Feick said.
Many of those four-wheels products rolled off the grounds at Texas Motor Speedway as GovPlanet held a live online auction on May 3. The event was the firm’s first Cat Auction Services unreserved public auction of the year in Texas, with more than 400 late-model tractors, backhoes and other pieces of heavy equipment sold. The highest bid was $275,000 for a Cat D8T crawler tractor.
Helping facilitate such events was the company’s 2015 merger with Cat Auction Services, bolstering sales with an integrated online platform for buying and selling. As mainstream online commerce becomes everyday practice, so has buying some of its higher-priced items.
“If you’re buying a $153,000 piece of equipment, you’ve got to be pretty confidence spending on that,” Holmes said. “It’s becoming more and more accepted.”