Pet supplies e-tailer Petopia.com pulled the plug on its planned US$100million initial public offering Friday, saying in a filing with the U.S.Securities and Exchange Commission (SEC) that it has sold almost all of itsassets and is no longer conducting business transactions.
The San Francisco, California-based company said it intends to use the proceeds from its assets sale topay off $2 million in debts and corporate expenses, such as itsmarketing expansion and brand-building campaigns.
In its IPO prospectus submitted to the SEC last March, Petopia maintainedthat its multi-channel partnership with Petco would enable the company tobecome 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 Webwhile Petopia said it would not team up with another offline pet retailer.Petopia had hired CIBC World Markets, SG Cowen and Wit Soundview to handlethe offering.
Despite its pending IPO plans, Petopia struggled for months to weather the harshe-commerce climate and in December was acquired by Petco for an undisclosedprice.
Petco has since consolidated Petopia’s e-commerce capabilities into its ownsite, which had previously served as an online brochure for its 530 physicalstores. In addition, users logging on to Petopia’s site are automaticallyredirected to the Petco home page.
Launched in August 1999, Petopia — like its three main competitors,PetSmart.com, Pets.com and PetStore.com — had high hopes ofcashing 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 obtainedadditional investments totaling more than $45 million in 2000.
Despite the infusion of capital, the firm found itself struggling tosurvive in a crowded arena, even as its niche rivals faltered.
In June, Web merchant PetStore.com sold most of its assets to competitor Pets.com, which itself shutdown 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 firmscuttled plans to raise $115 million through an IPO, deciding instead toconsolidate its operations with its brick-and-mortar counterpart.