FOSTER CITY, Calif. – Internet grocer Webvan Group Inc. went public November 5, offering 25 million shares at $15 apiece. The company’s stock priced at the top of its $13 to $15 filing range.
The initial public offering, which left 321.8 million shares outstanding, was underwritten by Goldman, Sachs & Co., Donaldson, Lufkin & Jenrette, Merrill Lynch & Co., Bear, Sterns & Co. Inc., Deutsche Bank Alex. Brown, BancBoston Robertson Stephens & Co. and Thomas Weisel Partners L.L.C.
There were no selling shareholders. Venture backers included Softbank America Inc., Sequoia Capital and Benchmark Capital.
The company’s online grocery service offers more than 15,000 items, including non-prescription drugs, which are delivered to customers by a fleet of vans within a 30-minute time frame. Webvan hopes to keep costs low by using a highly automated warehousing system.
The $350.5 million in proceeds expected from the IPO will be used for the construction and acquisition of equipment for new distribution centers, as well as for general corporate purposes, including working capital and funding of expected operating losses.
Webvan has never generated a profit, losing $3.3 million the first six months ended June 30, 1998 and $35.1 million the six months ended June 30, 1999.
David Beirne, a managing member at Benchmark, joined the company’s board of directors in October 1997, along with Michael Moritz, a general partner at Sequoia.
Webvan Group – Selected Financial
(in thousands, except per share data)
December 17, 1996 (inception) Year Ended Six Months Ended June 30
to December 31, 1997 December 31, 1998 1998 1999
Total revenue 395
Net loss -2,840 -12,004 -3,262 -35,134
Net loss per share -0.08 -0.18 -0.05 -0.48