Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: gdichaz who wrote (3609)	7/12/1999 11:54:00 AM
From: Teflon	Read Replies (1) \| Respond to of 54805

Chaz2, here is a terrific article on ICG (Internet Capital Group), SFE's big IPO coming out this summer. I thought some folks here might be interested. Will ICG Be the New CMGI? By Adam Lashinsky Silicon Valley Columnist 7/12/99 7:00 AM ET You'd probably never heard of CMG Information Services before the obscure direct marketer morphed into CMGI (CMGI:Nasdaq), the Internet venture firm with a rocket-powered stock. Shares of CMGI, the new majority owner of AltaVista, and an early backer of Lycos (LCOS:Nasdaq) and Geocities among others, have soared 14-fold in the past year. But not many investors knew the CMGI story a year ago. The good news is, you will soon get the chance to buy shares in a company that could well become the next CMGI: Internet Capital Group. The Wayne, Pa.-based company, which has been investing almost exclusively in business-to-business e-commerce companies, has filed for an initial public offering expected to be completed before the end of the summer. It's a big deal: ICG's proposed valuation tops $1 billion. That's $1 billion-plus for a portfolio of companies that had first-quarter revenue of $3 million. Investors won't be buying ICG shares based on the underlying business fundamentals of its investments, though. Rather, they'll be looking to invest in an unusual business model: a publicly traded venture capital firm. So far, four-year-old ICG has been a solid success. For instance, it netted $29 million on a seed investment in MatchLogic, which was acquired by Excite; it also racked up a $5 million profit on an early investment in WiseWire, which was acquired by Lycos. In its biggest success to date, ICG paid $21 million for a 37% stake in VerticalNet (VERT:Nasdaq), a business-to-business e-commerce portal based in Horsham, Pa. VerticalNet went public in February, and ICG'S stake is now worth about $700 million. Two other ICG holdings are nearing IPOs of their own: Deja.com, which used to be the newsgroup site Deja News and now offers Web surfers the chance to comment on a variety of products and issues, and Breakaway Solutions, a systems integrator. Deja.com, in which ICG holds a 32% stake, filed in mid-June to go public, with plans to raise as much as $57.5 million. Boston-based Breakaway Solutions, in which ICG holds a 57% stake, is expected to file for a public offering shortly. Included among the 35 ICG portfolio companies that aren't close to achieving their own "liquidity events" are plays in chemicals, paper, plastics, construction, printing, auto parts and consulting services. It's a gritty bunch that lack the glamour of eBay (EBAY:Nasdaq), Amazon.com (AMZN:Nasdaq) and Yahoo! (YHOO:Nasdaq) -- but they could still produce big revenue. An Internet Capital Group executive declined to comment, citing the obligatory quiet period before its pending IPO. But the company has been discussing its strategy since it opened shop in 1996. ICG's early focus on business-to-business may once have seemed a little loopy -- but no longer, with business-oriented sites moving to center stage in the hunt for hot Internet investments. Even their would-be competitors are impressed. "They caught a wave," says Robert Kagle, a partner at Benchmark Capital, a Menlo Park, Calif., venture capital firm that has been a heavyweight in business-to-consumer Internet ventures. "They have as interesting a collection of B-to-B investments as anyone out there." Hope this was helpful, Teflon