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Pet supplies e-tailer Petopia.com pulled the plug on its planned US$100 million initial public offering Friday, saying in a filing with the U.S. Securities and Exchange Commission (SEC) that it has sold almost all of its assets and is no longer conducting business transactions.
The San Francisco, California-based company said it intends to use the proceeds from its assets sale to pay off $2 million in debts and corporate expenses, such as its marketing expansion and brand-building campaigns.
In its IPO prospectus submitted to the SEC last March, Petopia maintained that its multi-channel partnership with Petco would enable the company to become a "leading" e-tailer in the competitive niche. The Internet pet store's big-name backers include brick-and-mortar superstore Petco, broadcast network NBC, BancBoston Ventures and Valuevision.
As part of their original deal 
, Petco agreed not to sell pet products via the Web
while Petopia said it would not team up with another offline pet retailer.
Petopia had hired CIBC World Markets, SG Cowen and Wit Soundview to handle
the offering.
Brick Buy-Out
Despite its pending IPO plans, Petopia struggled for months to weather the harsh e-commerce climate and in December was acquired by Petco for an undisclosed price.
Petco has since consolidated Petopia's e-commerce capabilities into its own site, which had previously served as an online brochure for its 530 physical stores. In addition, users logging on to Petopia's site are automatically redirected to the Petco home page.
Dog Days
Launched in August 1999, Petopia -- like its three main competitors, PetSmart.com, Pets.com and PetStore.com -- had high hopes of cashing in on the US$23 billion a year pet supply industry. Meanwhile, panting investors put hundreds of millions of dollars into online pet stores.
Petopia alone launched with financing in excess of $79 million, and obtained additional investments totaling more than $45 million in 2000.
Despite the infusion of capital, the firm found itself struggling to survive in a crowded arena, even as its niche rivals faltered.
Gone Fishin'
In June, Web merchant PetStore.com sold most of its assets to competitor Pets.com, which itself shut down before the end of the year.
After the PetStore and Pets.com closures, the sector still had Petopia/Petco and Petsmart.com working to sell pet supplies online.
Petsmart.com, however, has also had its own woes. In December, the firm
scuttled plans to raise $115 million through an IPO, deciding instead to
consolidate its operations with its brick-and-mortar counterpart.
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