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Tech Industry

Kozmo able to rustle up some funding

The online convenience store gets more than $30 million in a recent funding round, which could indicate that at least some investors are still optimistic about online retailing.

Investors are pumping new funds into online convenience store Kozmo.com, sources said, as many of its e-tailing counterparts are staring into empty coffers.

A group of investors has piled more than $30 million into the privately held company via a recent round of funding, sources close to Kozmo said Wednesday. And according to sources, the company has yet to finish passing around the hat. Sources also said the new group of backers includes several of the company's prior investors.

Among Kozmo's prior backers were venture capital firms Flatiron Partners and Softbank Venture Capital, and online store Amazon.com. Kozmo spokeswoman Stephanie Cohen Glass declined to comment.

The new investment into New York-based Kozmo, which delivers convenience goods ordered off its Web site to customers' doors, could be an indication that some investors are still optimistic about online retail. Most Internet merchants have not been able this year to attract new investments, causing hundreds of companies to lay off employees, sell out or shut down.

The Internet's other home-delivery companies, such as Peapod, Webvan and Urbanfetch.com, were once media darlings but have since been met with varying degrees of disaster.

Online grocer Peapod see A News.com webcast: Dot-coms: Down and out?barely avoided closure when it was acquired by Dutch grocer Royal Ahold. Webvan, the Internet's largest supermarket, has seen its shares sink below $1, losing more than 90 percent of their value. Online convenience store Urbanfetch, once Kozmo's main rival in New York, shuttered its e-commerce business in October.

Kozmo, one of the most successful e-commerce companies at attracting private financing, has received more than $150 million since snagging $28 million in its first round last year.

Kozmo filed in March to raise $150 million in an initial public offering. The April downturn in the technology stock sector caused the company to scrap its IPO plans last summer.