The winnowing of the electronic-marketplace crowd continued apace this week as two online debt-collection exchanges announced their merger.
E-Debt Financial Services and CollectionsX decided to stop competing with each another and approach the debt recovery market as a unified force.
"There isn't room for that many players, and we wanted to build one strong marketplace," CollectionsX CEO Alec Smythe said in an interview.
The combined company will be called eDebt and will be based in Atlanta.
Analysts long ago predicted that marketplaces would either merge or wither, leaving just one or two strong players in each industry. Both debt collection marketplaces began operating in 2000, which makes them relatively ancient in the online marketplace realm.
"While adoption hasn't moved as fast as anyone had hoped, we think we've got a strong business here," Smythe said.
E-Debt CEO Michael Zoldan said the new company will not only look to auction off bad debt portfolios from banks, credit card institutions and collections agencies, but it will also upgrade services aimed at financial institutions still looking to collect on their own accounts.
Despite a slumping economy and skepticism toward online marketplaces, Smythe said he still believes that eDebt has a few things going in its favor. The company has staked out a very specific niche for its services, and it doesn't trade goods that need to be shipped or invoiced, he noted.
"Plus, it's an industry that does pretty well in good times and very well in bad times," he said. "Someone's always got debt."