News > Deals withdraws IPO
August 18, 2000: 2:12 p.m. ET

Online home delivery service cancels $150M offering, citing market conditions
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NEW YORK (CNNfn) -, the online home delivery service that will bring everything from videos to snack food to your front door, withdrew its planned $150 million initial public offering Friday, citing unfavorable market conditions.

In a brief statement, the New York-based company, which has attracted several high-profile backers including (AMZN: Research, Estimates), asked the U.S. Securities and Exchange Commission to withdraw its application immediately.

The company originally filed to go public in March in a deal led by Credit Suisse First Boston, but had not yet indicated how many shares it expected to sell or at what price.

The withdrawal comes at a time when the IPO market has started to show significant signs of rebirth. But Internet stocks still largely remain out of favor with investors.

"At this time, we have the capital on hand, enough flexibility and confidence in our model to go public when it makes sense for the company," said Matt Higgins, a spokesman. "Our focus right now is on profitability."

Higgins said the company expects to refile for an IPO "sometime early next year."

The withdrawal also occurs as Kozmo is rumored to be mulling the acquisition of its chief rival,, which operates similar services in New York and London. Such a deal would allow Kozmo to gain a foothold in Europe in addition to boosting revenue. Higgins said the company had no comment on the rumors.

Profit hasn't followed expansion

Two young Wall Street professionals, Joseph Park and Yong Kang, founded in April 1997. Park, Kozmo's 28-year-old CEO, was an analyst in the corporate finance division of 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.

The company has experienced a rapid expansion since its creation as a video delivery service in New York City. Kozmo will now deliver everything from Starbucks brand ice cream to Krispy Kreme doughnuts to a Palm Pilot electronic organizer in 11 cities across the country in under an hour.

However, the company's growth has done little to pare its loses, which totaled $26 million on revenue of $3.5 million last year.

The company laid off 275 employees last week, and is rumored to be considering laying off an additional 40 employees, according to recent press reports. Back to top

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