A newly-created investment fund backed by Lycos (Nasdaq: LCOS) and a group of venture capital firms announced today that it has invested $8 million (US$) in three companies, two of which have recently filed for initial public offerings.
Lycos Ventures said it has invested in LifeMinders.com, a provider of personal e-mail reminders, Conducent, a provider of free, media-enabled software aimed at converging the Internet and software, and Fogdog Sports, an online sporting goods retailer.
Both Fogdog and Lifeminders have recently filed for public offerings with the Securities and Exchange Commission.
The investments are the first for the fund, which was established in July and staked with a total of $70 million. Lycos contributed $10 million, and partners Bear Stearns, Mellon Ventures, Vulcan Ventures, Sumitomo Corp. and others chipped in with the rest.
The fund’s managing director said that the investments will set the tone for the kind of companies it intends to back in the future.
“At Lycos Ventures, our investment strategy involves identifying breakout companies and then offering a road to success by combining funding with distribution on the Lycos network,” said Lycos Ventures Managing Director Dennis Ciccone. “All three companies offer extremely compelling products and are off to a great start in their respective categories of the Internet market. By providing critical capital along with Lycos know-how and audience reach, we feel strongly that these companies will become shining stars in this competitive industry and great assets for our fund and the Lycos network.”
Managing the Risk
The Waltham, Massachusetts-based Internet hub has taken a pragmatic approach to its investment strategy. Its CEO, Bob Davis, said earlier this summer that the company sees the fund as a way to “increase our investment position in a balanced, risk-managed fashion.” Loosely translated, it does not intend to throw money at start-up companies without having a say in the direction they are going.
Lycos’ existing portfolio consists of ownership or warrants in 11 companies. Among them are Mail.com, an e-mail service, FairMarket, an online auction technology company, NeoPlanet, a customizable desktop portal, AdOne, an Internet compilation of newspaper classified ads and Wit Capital Group, one of the first online investment banking firms.
These new additions through Lycos Ventures will expand that portfolio. Of the three, Fogdog Sports is the one with the most recognizable name. The company stocks nearly 60,000 items and 500 brands of sporting goods, including Nike, Wilson, Callaway, Rawlings and Easton.