E-commerce blow for Island: Full Service Trade System to relocate from Bermuda
`Bermuda has been an excellent location for use. However, start-up situations are very difficult to manager. Having the management team split between New York and Bermuda has created too many logistical problems for us at this time.' Bermuda will lose one of the world's largest entrepreneurial attempts at electronic commerce, a blow to the Island's attempts to become a international centre for such companies.
After three years of operation Bermuda-based Full Service Trade System Ltd.
yesterday announced it was pulling up stakes and relocating to New York. Full Service developed the TradeCard system for international electronic commerce, If TradeCard succeeds, and big investors are betting it will, the departure will loom as a huge missed opportunity for Bermuda, which is in the process of forming legislation to attract electronic commerce companies.
The decision to relocate was made after a $53 million investment in the company by venture capital provider E.M. Warburg Pincus & Co., LLC. Newly appointed chief executive officer Kurt Cavano said the company decided to consolidate operations so as to ensure efficiency and profitability.
Mr. Cavano, the former vice president of American Management Systems, was appointed as part of the investment deal. He has been appointed to spearhead the company's growth in to the import and export marketplace.
"Bermuda has been an excellent location for use,'' Mr. Cavano said.
"However, start-up situations are very difficult to manager. Having the management team split between New York and Bermuda has created too many logistical problems for us at this time.'' Bermuda-based chief financial officer Tony Nagel said the company would wind down operations over the next six months as the electronic trading systems are brought online in New York.
Full Service employs ten staff at the company's Par-La-Ville Road offices, six of whom are Bermudian. "Our staff has worked tremendously hard here in Bermuda to create this success and have been offered places in the new US-based operation,'' he said.
Full Service was set up in Bermuda about three years ago to develop TradeCard, an electronic method of international trade finance. The system, which went into operation last year, is now available in 29 countries and has the potential to become the means of conducting billions of dollars worth of business to business trade.
TradeCard was selected as one of the "Top 25 Technology Deals of the Year'' by Future Banker magazine for its patented electronic commerce system.
Full Service pulling out of the Island The company was set up with the backing of the World Trade Centres Association (WTCA), an international non-profit association which promotes cross-border trade and is based at the World Trade Centre in New York. WTCA was founded in 1970 and has a membership base of 500,000 companies worldwide.
Full Service has about 30 shareholders, including GE Information Services, insurance broker Marsh & McLennan Companies, international business and information technology firm AMS, and the WTCA. NationsBank Corp., the third largest bank in the US, and Standard Chartered Bank in London are also shareholders.
The company was set up with projections that it could reach a volume of up to 1.5 million trades a year in five years time, a small but significant chunk of the $3 trillion worth of international trade a year currently being done by letter of credit.
TradeCard is patented software that allows companies to buy and sell directly from their desktop computer over a secure electronic network provided by GE Information Services.