Netzee Inc, an Atlanta, Georgia-based provider of internet and e-commerce applications to small and medium-sized financial institutions yesterday filed with the Securities and Exchanges Commission for an initial public offering of up to $55m worth of its common stock. The firm’s prospectus outlined its plans to sell a 51% stake made up of Netzee-owned stock and stock held by other unidentified shareholders. The issue is slated for late November.
Netzee’s internet products give so-called community financial institutions, such as thrifts, credit unions and small banks, a platform to offer customer internet banking facilities. Its e- commerce product allows institutions to interact with business partners via hot links on their homepage. The company boasts a client roster of 289 community financial institutions.
In its filing it cites research that claims community financial institutions offer the richest pickings for internet services firms in the US. The market intelligence bulletin Online Banking Report found that only 5% offered online banking, compared to half of the 100 largest banks. Industry watcher, International Data Corporation, puts the current number of online bank users in the US at 8 million and projects that this will rise to 40 million by 2003.
Netzee has completed six acquisitions this year, including in the present third quarter the purchase of the internet banking divisions of community-based outfits The Independent BankersBank and The Bankers Bank. The firm posted net losses of $43.8m for the year ended December 31, 1998 on revenue of $3.1m and for the six months ended June 30, 1999 it lost $22m net on revenue of $2.1m. The IPO proceeds will be used to ramp up sales and marketing, product development and for potential future acquisitions. The remaining 49% stake in Netzee is held by small bank IT services and consulting house, the InterCept Group.
