StarMedia files for IPO
StarMedia Network, which means to become the Yahoo of Latin America, files for an initial public offering of up to $75 million.
The company, which in October landed $80 million in venture funding--the largest-ever private financing of an Internet company--didn't disclose a price range or number of shares for the offering.
The shares will trade on the Nasdaq exchange under the symbol "STRM." Underwriters are Goldman Sachs, BancBoston Robertson Stephens, J.P. Morgan, and Salomon Smith Barney.
StarMedia said in its filing with the Securities and Exchange Commission that it will use proceeds from the IPO for investments, expansion of its sales force, acquisitions, and general corporate purposes.
StarMedia faces major challenges from other big firms vying for the attention of Latin American Web surfers--most notably Yahoo and America Online.
Two months after StarMedia announced its mammoth financing deal, AOL announced that it had entered a joint venture with Venezuelan media conglomerate Cisneros Group to launch its Latin American effort in Brazil, Mexico, and Argentina. At the time, StarMedia chief executive Fernando Espuelas called his company "the 800-pound gorilla on the Internet in Spanish," and called AOL a "start-up" in Latin America.
Yahoo's service, called Yahoo en Español, includes more than 5,000 Web sites and is aimed at Spanish-speaking people around the world.
According to its filing, StarMedia lost $45.9 million in 1998 on revenues of $5.3 million.
Traffic boomed in 1998, however. The company says that page views leaped from 7 million in December 1997 to 61 million in December 1998, with 2.4 million unique visitors using the site that month.
Another challenge for StarMedia: expanding its business and attracting advertisers in the midst of economic problems in several Latin American countries.
StarMedia's aim is to link Spanish- and Portuguese-speaking Net surfers around the world, as well as to provide local and country-specific content.
Investors taking part in last December's financing--the company's second venture round--included Warburg Pincus, General Electric Equity Capital Group, Morgan Stanley Dean Witter, Platinum Venture Partners, and executives from Kohlberg Kravis Roberts.