CyberSource readying IPO plans

Executives are said to be trying to raise the company's profile before it goes into a quiet period prior to an IPO.

Jan. 2, 2002 4:43 p.m. PT

2 min read

CyberSource, which provides e-commerce services to some of the most highly trafficked sites on the Web, is preparing to file an initial public offering later this year.

A source close to the company said CyberSource executives are trying to raise the company's profile before it goes into a quiet period prior to an IPO. CyberSource aims to capitalize on the rapid growth in consumer buying over the Internet by offering consumer-oriented merchants an easier way to get into Net commerce.

For co-founders Bill McKiernan and John Pettitt, chief technology officer of Beyond.com, a public stock offering would be the second in 12 months. The company, which offers a menu of services on a pay-per-use basis, last year split off from software store Beyond.com (then called Software.net), which raised $48 million in its own IPO in June 1998.

CyberSource officials declined to comment on IPO plans.

McKiernan, who also is chairman of Beyond.com, owns about 28 percent of Beyond.com's stock, according to a regulatory filing this month for Beyond.com's $92.5 million secondary offering. Pettitt owns about 4 percent. No ownership percentages are available yet for CyberSource.

CyberSource has venture funding from Paul Allen's Vulcan Ventures and Unterberg Towbin. (Allen is an investor in CNET: The Computer Network.)

"We feel the company has a story that resonates with customers, especially business-to-consumer merchants," said William Donahoo, CyberSource vice president of marketing, who says it now has about 400 customers.

CyberSource offers a menu of e-commerce services that merchants can utilize on a pay-per-use basis. Today the company added a real-time address verification service designed to reduce shipments to the wrong address.

The company also offers payment processing, fraud screening, sales tax calculation, export control and territory management, digital delivery services for downloading software or other digital goods, and other e-commerce services. Also today it announced that CBS MarketWatch.com will use CyberSource services for a future subscription offering.

CyberSource counts major e-commerce sites as customers, including Buy.com, Ticketmaster CitySearch, Egghead.com, Hotmail, Intuit, Novell, Playboy, and Shopping.com.