Fidelity Ventures develops niche in Net start-ups

 Secondary Battery Fidelity Ventures is hunting for the next eBay. The venture capital firm, investing funds raised from affiliates of the mutual fund giant Fidelity Investments, has been carving out a niche bankrolling Internet start-ups that connect buyers and sellers of everything from loans to receivables to airplane parts. Operating quietly from Boston's financial district, Fidelity Ventures recently backed a European version of StubHub. It led a $25 million funding round in February for Seatwave, a British company that sells tickets for sporting matches, concerts and other entertainment events on the secondary market. But that was merely the firm's latest investment in emerging companies running online auctions. "We're looking for very big markets that are very inefficient and have clear value to people on both sides of the transaction," said Larry Cheng, a Fidelity Ventures partner who has worked within the firm to build up an Internet marketplace specialty. Back in September 2005, at a Fidelity Ventures gathering at the Harvard Club in downtown Boston, Cheng made a pitch for investing in Prosper, a San Francisco start-up that matches individual lenders and borrowers in a "people to people" marketplace.