For VCs, Internet bubble survivor Ice.com retains luster

Started back in 1999 during the tech bubble, the company was once part of Bill Gross' Idealab, the birthplace of several startups, such as eToys Direct Inc. and Overture Services Inc. (now a unit of Yahoo Inc.).

The lessons Ice.com learned navigating through the tech meltdown played a part in the decision of Alan Spoon, a managing general partner at Polaris and new Ice.com board member, to back the company.

"It's fascinating how some strong e-commerce leaders those days got through that era by putting down deep roots in an arid market," Spoon said.

Shmuel Gniwisch, Ice.com's co-founder and CEO, said: "We learned from our mistakes, and we made a lot of them, but we picked up the pieces and moved on. Every single deal we signed [then] had to be a profitable one. It wasn't about building for the future, it was about building for the now."

Gniwisch says that the company, which is based in Champlain, N.Y., and Montreal, plans to use the capital to rebuild its infrastructure and technology.

"We've been changing the tire of a moving car for the last seven years," Gniwisch said. "Now we have the liberty of building a new car while we're changing this tire and transferring everyone into it at high speed."

According to Gniwisch, the company's top line grew about 60% in 2007, and revenue is expected to increase 40% to 50% in 2008, but with a "solid infrastructure in place."

Ice.com posted revenue of $83 million in 2007.

Daniel Burnham and Brad Schwartz of Strategic Law Partners LLP was counsel to the company, while Foley Hoag LLP represented Polaris in the deal.