Washington entrepreneurs Ted Leonsis and Steve Case have made the first big investment with their $450 million Revolution Growth fund, acquiring a major stake in Vienna-based FedBid, which they hope to grow into an online marketplace for tens of billions of dollars in government procurement.
The investment was made less than two months after the two former AOL executives announced the formation of the fund, a private investment vehicle designed to reignite the high-tech, entrepreneurial culture that dominated Washington in the 1990s.
Leonsis and Case would not disclose the amount of the investment, but sources familiar with the transaction who are not authorized to speak on the record, said the amount was about $25 million.
The deal closed Friday.
“We love that it’s a local company and that it is serving probably the biggest market there is,” said Leonsis, who will become FedBid’s chairman. “The federal government is the largest buyer of goods on the planet, and this is a big, vertical, e-commerce company being used to save the government lots of money and provide much more efficient delivery of services for the government.”