Tradeshift gets $17 million from Russian investors

B2B social network called 'Skype for invoicing,' continues its shake-up of EDI protocol

Business-to-business social network Tradeshift announced Tuesday a $17 million round of funding led by Russian investors, ru-Net and Kite Ventures. Previous investor Notion Capitol is also in on the investment, increasing the company's stake in Tradeshift.

Tradeshift has been valuated at $137 million, making this one of the biggest investments in a European start-up this year.

Tradeshift describes itself as a social network for businesses with online tools for expediting the flow of invoicing documents, as well as for fostering relationships. The company has often been called "Skype for invoicing."

Tradeshift secured initial investments in February 2010, immediately making waves with what some called a major disruption of the current invoicing model.

This disruption can be best characterized as a movement of business-to-business invoice documents from an Electronic Data Interchange (EDI) protocol to cloud computing. Rather than functioning on hand-created PDF invoices, accounts running on Tradeshift's system monitor trade rates and automatically make business transactions when prices are cheapest.

Called Instant Payments, the shift of invoicing from EDI to cloud computing is considered by some to be a major innovation in the way businesses talk to each other.

Tradeshift's launch was also wave-making for the involvement of Skype investor Morten Lund, who served Tradeshift as an advisor. Having made a name as an "archangel investor," Lund had declared personal bankruptcy two years before reemerging with Tradeshift.

Other investors include PayPal, which loaned Tradshift a sum between $16 and $21 million in October of 2010.

Tradeshift currently has offices in London, Munich, Bern, and Brasilia. While their customers include the largest communications company in Denmark, TDC, Tradeshift targets businesses of all sizes. Russia's ru-Net and Kite Ventures were chacterized in Tradeshift's recent press release and blog post as part of a new wave of European investors focusing on high-tech and Internet companies.