>>>Benny(IMHO...I just had to get that off my chest).
I hope this makes you feel a little better...details on Princeton eCom. 80 employees and 3.8 Million in sales. They're trying to get 12 x sales in the offering...not to mention that BILL ownes 23%.
Equity Analytics, Ltd.
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Princeton eCom Corp.
Click to view the Company's S-1 filing with the SEC
A comprehensive list of current filings can be found here
165 Wall Street
Princeton, New Jersey 08540
Phone: 609-924-1244
Filing date: March 31, 1999
SIC Code: 7374
Proposed ticker: ECOM
Exchange: Nasdaq National Market
Proposed offer price:
Shares offered (mil.):
Offering amount (mil.): $46
CEO: Donald C. Licciardello
CFO: Christopher S. Sugden
Fiscal Year-End: December
1998 Sales (mil.): $3.822
1-Yr. Sales Change: 26%
1998 Income (mil.): ($3.355)
1-Yr. Income Change: (57%)
Employees: 80
Underwriters: BancBoston Robertson Stephens Donaldson, Lufkin & Jenrette: Internet distribution: E*TRADE Securities; DLJdirect Inc.
We are a provider of Internet bill publishing and payment services for financial institutions and large businesses that generate a substantial number of consumer bills. Our electronic services, utilizing the Internet, the telephone and private computer networks, eliminate the need for billers to generate and mail paper bills and eliminate the need for consumers to write and mail paper checks. Our services allow billers to publish and present bills to consumers, either directly through billers' own web sites or indirectly through the web sites of financial institutions and Internet portals. Our electronic payment services provide an efficient billing solution that automatically updates billers' financial accounting systems by electronically delivering payment information. Concurrently, the consumer's bank account is electronically debited to pay the bill. As of March 31, 1999, we service over 250 billers and financial institutions, of which a limited number are currently using our Internet bill publishing and payment service.
Industry Background
Growth of the Internet and Electronic Commerce
The Internet has experienced rapid growth and has developed into a significant tool for global communications and commerce. It has enabled millions of people to share information and transact business electronically. In 1998, International Data Corporation, or IDC, estimated that there were 52 million users of the Internet in the United States. IDC projects that the number of people using the Internet in the United States will increase to over 135 million by the end of 2002. Internet-based businesses, as well as traditional businesses, now use the Internet to offer a variety of products and services, including consumer products and brokerage and other financial services. Advances in online security and payment mechanisms have also encouraged businesses and consumers to engage in electronic commerce. Forrester Research estimates that sales over the Internet will increase from $7.8 billion in 1998 to $108 billion in 2003.
Emergence of Internet-based Financial Services
Internet-based financial services, like electronic brokerage and banking, represent a significant portion of the electronic commerce market. The attractiveness of Internet-based financial services stems in large part from the speed of conducting financial transactions over the Internet, as well as the ability of the Internet user to access extensive amounts of information. Forrester Research estimates that the number of online brokerage accounts will grow from 3.0 million in 1997 to 14.4 million by the year 2002 and that assets managed online will reach $688 billion by the year 2002. Similarly, Forrester Research estimates that online banking will grow from 2.4 million households in 1998 to 18 million in 2002. The Internet is also becoming a more significant platform for broad consumer-based financial services like insurance, mortgages and bill presentment and payment.
Traditional Bill Fulfillment and Payment Process
According to Jupiter Communications, in 1998 approximately 15 billion consumer paper bills were received by approximately 100 million U.S. households. Most of these are recurring monthly or quarterly bills mailed to consumers primarily by retailers, utilities and credit card companies. Paper bills are prepared by either the biller itself or, more often, by an outsourced bill fulfillment vendor. Creating and distributing a paper bill is a costly multiple-step process that includes extracting relevant data from the legacy accounts receivable system of the biller, organizing the data into a billing format, printing and separating the bills, stuffing envelopes, applying postage and mailing the bill to the consumer. The bill payment process is also costly and labor intensive. The biller must currently contract with a commercial lockbox which receives consumer payments. The lockbox vendor opens the payments and separates checks from the remittance stub. The lockbox vendor also sends the biller reports which allow the biller to update both its accounts receivable system and its accounting records. We estimate that the cost to the biller of preparing and sending a paper bill and receiving and posting a bill payment ranges from approximately $0.75 to $1.60 per bill. According to the Gartner Group, the average cost to the biller of creating and delivering a paper bill is $1.00.
Similarly, the traditional bill fulfillment and payment process is time- consuming and can be costly for the consumer. We believe the Internet bill presentment and payment process will bring added convenience to the consumer. Jupiter Communications currently estimates that, during each 12-month period, U.S. households will spend an average of 24 hours on bill management, $46 on postage and $144 on check-writing fees to handle an average of 12 recurring monthly bills. The graph below depicts the steps involved in the traditional paper-based billing and payment process:
Internet Bill Presentment and Payment Process
The Internet provides an opportunity to dramatically simplify the bill presentment and payment process. This technology will greatly reduce the costs to the biller and improve the convenience of the billing and payment process for the consumer. The biller compiles relevant data from its legacy accounts receivable system and can either publish the data itself on its own web site or release the data to a bill publisher which publishes the data on the web site of the consumer's financial institution or on an Internet portal like Yahoo! or America Online. Consumers are able to access their bill and account information whenever they wish and may pay bills by clicking a payment symbol on the computer screen. Funds are electronically transferred from the consumer's bank account, through a payment network like the Federal Reserve System, to a concentration account of an electronic lockbox service where all payments to a particular biller are deposited and transferred to the biller's bank account. Bill and account information is accessible by the consumer through the legacy accounts receivable system, which is continuously updated to reflect consumer payments. We estimate that the total cost to the biller and the consumer for our Internet Bill Publishing Service ranges from $0.35 to $0.50.
The Internet bill presentment process can be viewed as analogous to the process of creating, distributing and selling books. A number of parties are potentially involved in this process. The parties involved typically include the following:
Billers: The principal billers are retailers, utilities and financial institutions that issue credit cards. Although there are thousands of billers, we believe that a large portion of total bills generated are produced by a concentrated number of billers. The biller would be equivalent to the author in the book publishing analogy.
Publishers: The publisher compiles, formats and verifies the information in the accounts receivable data base and then creates a bill for presentment on the Internet. A publisher may be either the biller itself or an entity, like us, that provides an outsourced publishing solution for multiple billers. This publishing role is similar to the role of the book publisher which takes the content provided by the author and packages the book for distribution.
Aggregators: An electronic biller is generally required to engage one or more aggregators which collect consumer bills from numerous publishers and sort and present these bills to consumers through the Internet. Aggregators enable, through presenters, a consumer to access account information regarding multiple billers on a single web site, rather than having to go to each individual biller's web site to access account information. The aggregator performs a role similar to that of a book distributor, which has arrangements with multiple publishers and retail outlets to facilitate the distribution of the publishers' books to the retail outlets.
Presenters: Once an aggregator has received and sorted bills created by the publishers, these bills can be presented on the web sites of one of two types of presenters: financial institutions or Internet portals. These presenters are comparable to the retail outlets and other means by which consumers directly purchase books.
Outsourcing Opportunity
As the use of the Internet for bill presentment and payment grows, billers must decide whether to develop this capability internally or to outsource the process entirely. Billers that choose to manage their own Internet bill presentment and payment process may encounter a number of obstacles. To be in a position to publish and achieve wide distribution of their bills, billers must purchase, successfully integrate and maintain:
software which enables the biller to parse and decode bill data print streams;
in-house publishing servers which will update and display bill content;
messaging software like OFX, EDI and NT, which enables the biller to communicate with multiple aggregators;
automated clearinghouse software which enables the biller to electronically debit consumer accounts;
a dedicated interface with a major bank which enables the biller to receive funds and data through automated clearinghouse transactions; and
lockbox software which enables the biller to update legacy accounts receivable files.
In addition, once billers are capable of publishing and handling payments, they must then make arrangements with multiple aggregators or presenters that present bills for multiple billers.
Many billers lack the resources and expertise to cost-effectively implement, maintain, scale, enhance and service the hardware and software necessary to provide their own Internet bill presentment and payment system and to develop and maintain multiple relationships with aggregators or presenters and financial institutions. Billers can outsource their Internet bill presentment and payment process. An outsourced solution is attractive to billers because it allows them to focus on their core competencies and to accelerate the time in which they can offer Internet bill presentment and payment services to their customers.
The Princeton eCom Solution
Our Internet bill publishing and payment service provides a comprehensive, cost-effective, outsourced solution for billers desiring to reduce costs and to provide their consumers with a convenient presentment and payment method. Our service is designed to publish bills for billers either directly through their own web site or indirectly through the web sites of financial institutions and Internet portals. Our Internet bill publishing and payment service is designed to provide the following key benefits:
Comprehensive, Cost-Effective Outsourcing
Our comprehensive solution offers billers the full range of services necessary to outsource their entire Internet bill presentment and payment process. Our service reduces the costs to and administrative burden on billers by eliminating the need to develop and manage an in-house system and by capitalizing on economies of scale and implementation expertise.
Broad Distribution and Access
Our relationships with multiple aggregators allow broad distribution that enables billers to publish their bills through multiple presenters, thereby providing their consumers with numerous options of where and when to access and/or pay their bills. In addition, our technology allows consumers to access their bills through the computer, the telephone, personal digital assistants and through a variety of other devices.
Branding
In all aspects of our Internet bill presentment and payment service, the Princeton eCom name is virtually invisible to the consumer. Our fully customized Internet-based consumer billing interface allows billers, financial institutions and Internet portals to preserve the existing look and feel of their web sites.
Reliability and Scalability
Our system architecture is designed to ensure reliability through the use of parallel processing and redundant hardware and software components. Currently, our system supports over 80 million accounts receivable records monthly and can be easily expanded.
Enhanced Security
We have integrated third-party licensed and internally- developed technology with sophisticated third-party hardware to reduce the potential for network security breaches. We maintain network and data center surveillance 24 hours a day, seven days a week.
Ease of Implementation
Our service can be easily integrated with a biller's existing legacy accounts receivable systems. We enable billers to provide Internet bill presentment and payment to their consumers without modifications to their existing systems or to their processing and reconciliation procedures.
The Princeton eCom Strategy
Our goal is to strengthen our position as a leading provider of Internet bill publishing and payment services. We plan to achieve this goal by implementing the following key strategies:
Further Penetrate Our Existing Customer Base
We believe that our existing base of billers and financial institutions which do not currently use our Internet bill publishing and payment service provides substantial opportunities for expansion of this service. To date, only 11 of our over 250 customers utilize our Internet bill publishing and payment service. We intend to further penetrate this existing customer base by substantially expanding our sales and marketing efforts and service offerings.
Expand Our Sales and Marketing Efforts
We are developing a sales and marketing plan directed towards the largest billers in the United States that do not currently use any of our services. To implement this sales and marketing plan, we are recruiting a number of experienced sales professionals. To date, we have spent a nominal amount on our sales and marketing efforts. We intend to substantially increase these expenditures during the next several years. In addition, we intend to expand our indirect sales channels by establishing strategic relationships with companies like GE Capital, Alltel and CSG Systems, which should enable us to gain access to the biller bases of these companies.
Expand Our Distribution Channels
We intend to expand our distribution channels by developing relationships with additional aggregators. Because aggregators rely upon bill publishers with significant biller relationships, we believe that aggregators will find us more attractive as our biller base expands. To date, we have relationships with a number of aggregators, including TransPoint, a Microsoft/First Data Corporation/Citigroup joint venture, and Intuit.
Introduce New Services and Service Enhancements
We seek to remain on the forefront of the Internet bill presentment and payment industry by continuing to develop more advanced services designed to address our customers' needs. We use customer feedback, including surveys, to design service enhancements that meet evolving customer needs. Examples of service enhancements which we have previously developed include interactive data, which enable consumer-initiated bill analysis on the Internet, one-to-one marketing and electronic commerce transaction capability. In some circumstances, we also develop specific applications to meet the needs of particular customers. For example, we developed a system for Sallie Mae that electronically updates student loan information.
Pursue Strategic Acquisitions
We intend to pursue strategic acquisitions that complement our business. We may acquire companies to obtain additional technologies, billers, services or experienced personnel.
Sales and Marketing
Historically, our sales and marketing efforts have been limited to specific face-to-face meetings with a limited number of potential billers and financial institutions and we have spent a nominal amount on these efforts. We are developing a sales and marketing plan directed towards further penetrating our existing base of billers and financial institutions which do not currently use our Internet bill publishing and presentment service while simultaneously targeting the largest billers in the United States that do not currently use any of our services. To implement this sales and marketing plan, we are recruiting a number of experienced sales professionals. We intend to substantially increase our sales and marketing efforts and expenditures over the next several years. In addition, we intend to expand our indirect sales channels by establishing strategic relationships with various companies in order to enable us to gain access to the biller bases of these various companies. To date we have entered into strategic relationships with TransPoint and Intuit.
We intend to use a variety of marketing programs to build market awareness of Princeton eCom and our services and to generate new business. These programs include:
market research;
service and strategy updates with industry analysts;
public relations activities including press releases and featured news articles;
direct mail and relationship marketing;
trade shows;
speaking engagements; and
web site marketing.
Competition
For customers seeking a complete outsourcing solution, we believe that we currently face direct competition from only a limited number of companies. However, we anticipate that competition in the Internet bill presentment and payment market will intensify in the future as:
traditional lockbox service providers and traditional bill fulfillment vendors attempt to offer Internet bill presentment and payment; and
new providers of electronic lockbox and Internet bill presentment services develop.
We also face indirect competition from various third-party software vendors, including Bluegill, eDocs, Just in Time Solutions and Sterling Commerce, which develop some of the software necessary for the development of an integrated, in-house Internet bill presentment and payment service. In addition, these companies could potentially leverage their existing capabilities and relationships to enter the outsourced Internet bill presentment and payment market.
Competitive pressures would have a material and adverse effect on our business, operating results and financial condition. We believe that the principal competitive factors in our market, are:
ability to identify and respond to customer needs;
technical expertise;
quality of the service;
price of the service;
breadth of distribution through aggregators, and ultimately presenters; and
preexisting relationships that traditional bill fulfillment vendors and lockbox service providers may have with our potential customers.
e-analytics.com
They'll probably offer it @ $14 and it will go to $60 the first 2 days or something ...that's why I picked up BILL a while back cause the got 23% for $10 Million cash...when the market catchs up to that they can watch me do an imitation of a Dump Truck.... |
