|
Kozmo.com files for IPO
|
 |
March 21, 2000: 3:19 p.m. ET
Online home delivery service did not disclose price or number of shares
|
NEW YORK (CNNfn) - Kozmo.com, which has become a popular home delivery service in several major U.S. cities, filed Tuesday for an initial public offering of stock.
New York City-based Kozmo.com filed with the Securities and Exchange Commission to sell shares through underwriters Credit Suisse First Boston, Salomon Smith Barney, and U.S. Bancorp Piper Jaffray. The filing did not disclose the number of shares nor the estimated price for the shares, which are expected to trade on the Nasdaq market under the symbol "KZMO."
Kozmo.com enables consumers to order videos, DVDs, music, and other items through its Web site and then have those items delivered to the customer for free in less than an hour. In the words of Kozmo.com's SEC filing: "Our promise of under one hour delivery is designed to satisfy a consumer's desire for immediate gratification."
Kozmo.com was founded in April 1997 by two young Wall Street professionals - Joseph Park and Yong Kang. Park, the 28-year-old CEO of the Kozmo.com, was an analyst in the corporate finance division of the blue chip investment bank Goldman Sachs & Co. Kang, the company's 27-year-old president, was an assistant vice president at Societe Generale in the media and communications group.
Kozmo.com operates in cities such as, New York, Seattle, San Francisco, Boston, Washington, D.C., and Los Angeles. It plans to enter at least 10 additional markets by the end of this year. The number of customers registered on its Web site grew at a compounded monthly rate of 30 percent in 1999, the SEC filing said.
Revenues small, backers big
While many urban residents are familiar with the Kozmo brand name, the company's revenue to date has been small, totaling only $3.5 million in 1999. The cost of building and expanding its delivery network has vastly exceeded its sales, causing Kozmo.com to lose about $29 million last year. In addition, Kozmo.com said in the filing that it will continue to incur net losses and have negative cash flow "for the foreseeable future."
On the other hand, Kozmo.com has several large corporate backers, which include online retailing giant Amazon.com, Columbia TriStar Home Video, and Warner Home Video. The company had raised about $202.5 million in cash from its corporate partners as of the end of last year, the filing indicated.
The IPO filing comes one day after Amazon.com Inc. (AMZN: Research, Estimates) revealed that it will take a $60 million stake in Kozmo.com, enabling delivery of Amazon books, CDs and toys to customers within hours. The long-rumored alliance between the two Web companies was reached last December, but not disclosed until Monday.
Kozmo.com said in the filing that it plans to use the proceeds of the offering for "general corporate purposes," but that it has "no specific plans for allocation of the proceeds." 
|
|
|
|
|
|
Kozmo.com
|
Note: Pages will open in a new browser window
External sites are not endorsed by CNNmoney
|
|
|
|
 |
|
