NetGrocer Inc is set to test the waters of the intitial public offering market, in which internet companies have recently seen their fair share of success. The New York-based company, which sells groceries over the internet, has filed with The Securities and Exchange Commission to raise up to $37.95m in an IPO. The number of shares to be offered has yet to be determined, but all of them will be offered by the company, which said it will use the proceeds primarily for strategic marketing alliances, capital expenditures and general corporate purposes. Lead underwriter for the offering will be CIBC Oppenheimer Corp. NetGrocer has 63 employees and saw revenue of $281,200 last year, recording a net loss of $3.6m for the period. Chief operating officer Richard Falcone said his company, although it faces national competition from Peapod Inc, which went public last year, is set to benefit from a different business model. While Peapod procures it products from retail supermarket chains and then has employees deliver them, NetGrocer operates its own warehouses, thus controlling its selection and pricing more effectively. The company then uses Federal Express to ship its non-perishables anywhere in the continental US. The company hopes its approach will allow it to take a healthy share of a market which Falcone figures will be worth about $5bn-$6bn in a year, although he wouldn’t make any revenue projections or offer a timetable for profitability. Peapod has yet to turn a profit, last week posting a second-quarter loss of $4.5m on revenue up 25% at $17.5m. NetGrocer also competes with various regional services, although Falcone doesn’t seem overly concerned about them. The company’s shares will eventually trade on the Nasdaq National Market under the symbol NTGR.
