Digital River Inc, the electronic software hosting and distribution company that last week launched the second version of its service, (CI No. 3,428) has filed for its initial public offering, aiming to raise up to $40m before expenses. The Minneapolis, Minnesota company hosts software from many top publishers, including IBM Corp’s Lotus, Symantec Corp and Adobe Systems Inc and distributes the software over the internet when customers require it, talking a percentage for itself, but charging the companies themselves nothing to host the software. The filing with the Securities & Exchange Commission reveals losses for the first quarter of this year of $1.6m on revenues of $2.3m, against losses of $480,000 on sales of just $179,000 for the same period last year. In the whole of 1997 the company lost $3.5m on revenues of $2.5m, so it is clear the company’s business only really got going this year. Version 2 has been out with customers for some time, but was only officially announced yesterday. The company closed its third round of financing, $13m, in April. It had $10.0m cash as of March 31. The filing shows that less than 5% of the company’s sales same through the web sites of software retailers and resellers, with the rest coming from the sites of the software companies themselves. That is an area the company is trying to expand upon and it is expected to announce a deal with one of the most prominent web-based resellers any day now. The founder, president and CEO Joel Ronning is the largest single shareholder, with 26% of the company; parent Tech Squared Inc has 23% and original partner Fujitsu Ltd has 16%. The money will be used for working capital, product development and sales and marketing. The offer is led by BT Alex Brown Inc, BancAmerica Robertson Stephens and Bear, Stearns & Co Inc.
