Safeguard Scientifics to Double Internet-Related IPOs in 2000
Boston, Nov. 9 (Bloomberg) -- Safeguard Scientifics Inc., a publicly traded venture-capital company that holds a stake in Internet Capital Group LLC, will double the number of companies it takes public next year to at least six.
Two companies that are likely to go public next year include eMerge Interactive Inc., which helps producers sell cattle on the World Wide Web, and Opus360, a New York-based company that links technology workers or consultants with employers, Safeguard President Harry Wallaesa said in an interview at the company's Strategic Thought Leadership Conference in Boston.
Safeguard invests in companies that fall into three markets: electronic commerce, electronic business software and services, and electronic communications, he said. The company earlier this year started a program that lets its shareholders get stock in the IPOs of its investment companies, which is also helping Safeguard raise its profile among investors.
``Safeguard is the best-kept secret on Wall Street,' Wallaesa said. ``We owe (CMGI Inc. Chairman) Dave Wetherell a debt of gratitude for getting the spotlight on this space.'
CMGI, based in Andover, Massachusetts, is another publicly traded venture capital company that focuses on Internet-related businesses. Still, CMGI's stock has surged more than fivefold over the past 12 months, while Safeguard's stock has more than tripled.
No Latecomer
``There's a misperception that Safeguard was late to the Internet game,' said Wallaesa. ``Safeguard's investment in (Internet Capital Group) came in 1995. The two fellows who started it came from Safeguard.'
Internet Capital Group, which went public in August at $12 a share, rose 3 3/4 to 189 1/2 in late trading, giving it a market value of $23.3 billion. CMGI, whose shares were unchanged at 104 1/4, has a market value of $12.2 billion. Safeguard, worth $4.2 billion, rose 3 7/8 to 120 1/2. Safeguard owns about 15 percent of ICG, Wallaesa said.
Safeguard focuses on business-to-business Internet companies, which typically aren't as well known as the business- to-consumer Internet companies that CMGI has invested in.
For example, Safeguard was an investor in Pac-West Telecomm Inc., which provides lines for phone and data in California and other Western states, and whose shares have more than doubled since its initial public offering earlier this month. CMGI has invested in consumer Web sites such as AltaVista, the search service, and GeoCities, the homepage Web site.
Still, the business-to-business Internet market is expected to explode over the next several years. Business-to-business electronic commerce will boom to $1.38 trillion by 2003 from just $30 million last year, according to an International Data Corp. study.
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