SmarterKids.com Inc. –

NEEDHAM, Mass. – SmarterKids.com Inc., an educational products e-tailer, went public November 23, offering 4.5 million shares at $14 apiece. The company’s stock priced in the middle of its $13 to $15 filing range.

Underwritten by Hambrecht & Quist Group, U.S. Bancorp Piper Jaffray and E*OFFERING Corp., the initial public offering left 19.3 million shares outstanding.

North Bridge Venture Partners, Commonwealth Capital Ventures L.P., Brighter Vision Holdings Inc., Intel Corp., Van Wagoner Capital Management and WMUR TV Inc. were venture backers. There were no selling shareholders.

The company sells games, software, hands-on activities and other educational products through its Web site’s evaluation system, which matches products to children’s individual needs and learning styles. Founded in 1994, the company also has been involved in software development and children’s intelligence tests under the names Virtual Entertainment and Virtual Knowledge.

The $57.6 million in proceeds expected from the IPO will be used for general corporate purposes, including working capital.

SmarterKids.com has never generated a profit, losing $1 million in 1997 and $3.3 million in 1998.

Richard D’Amore, a general partner at North Bridge, joined the company’s board of directors in November 1998, along with Michael Fitzgerald, a general partner at Commonwealth Capital.


SmarterKids.com – Selected Financial

(in thousands, except per share data)

Year Ended December 31 Nine Months Ended September 30

1994 1995 1996 1997 1998 1998 1999

Total revenue 219 401 1,240 1,416 2,300 1,815 1,108

Net loss -477 -1,470 -1,649 -1,014 -3,342 -1,461 -14,142

Net loss per share -0.32 -0.98 -1.1 -0.72 -2.34 -1.01 -8.1