Prospectus Summary
You should read this summary together with the entire prospectus, including the more detailed information in our financial statements and accompanying notes appearing elsewhere in this prospectus. Unless otherwise indicated, all information contained in this prospectus assumes: (1) no exercise of the underwriters' over-allotment option, (2) the conversion of each outstanding share of preferred stock into four shares of common stock and (3) no exercise of outstanding stock options or warrants.
Blue Martini Software, Inc.
Our Business
We provide e-business software and services that enable companies to build brand equity through direct customer interaction across Internet-related customer "touch points," such as websites, mobile wireless devices and on-line trading exchanges and traditional customer touch points, such as stores and call centers. We believe that our software's integrated analytical and operational capabilities enable companies to increase revenues by coordinating customer interactions across these touch points. Our comprehensive, packaged software application is designed to simplify deployment and accelerate our customers' time to benefit while reducing their total cost of ownership. We have targeted a number of large, vertical markets where we believe brand is paramount, such as retail, manufacturing, financial services, telecommunications, media and travel. Our customers range from Global 2000 companies that have adopted e-business strategies to rapidly growing Internet companies. As of March 31, 2000, we had licensed our software to 35 customers.
Our Market Opportunity The use and acceptance of the Internet as a medium for interacting with customers are evolving at rates significantly faster than those experienced by traditional media. According to estimates by International Data Corporation, business-to-business and business-to-consumer transactions are expected to grow from an aggregate of $111 billion at the end of 1999 to $1.3 trillion by the end of 2003. The increasing importance and prevalence of the Internet has further heightened the importance of brand equity and awareness. A powerful brand can attract and retain customers, generating higher revenues and increasing customer value.
We believe that companies need to be closer and more responsive to their customers than ever before and, in order to compete more effectively, must coordinate their on-line branding, marketing and merchandising efforts with their traditional sales channels. To address this need, we have developed an integrated suite of enterprise software applications that is designed to offer the following capabilities:
. Product Management. Our software enables companies to richly, accurately and persuasively describe their products and product hierarchies, establish pricing and create promotions.
. Content Management. Our software enables companies to author, manage, approve and track the development and use of content, such as text, graphics, audio and video.
. Transaction Execution. Our software enables companies to conduct business on their websites, over the phone, via wireless devices and through other sales channels, including taking orders and managing returns.
. Analysis. Our software's analytic capabilities increase companies' ability to accurately identify market segments, deeply understand customer behavior, readily mine purchase histories and determine strategies to effectively target customers.
. Personalization. Our software's sophisticated algorithms enable companies to effectively target customers across multiple touch points with meaningful and relevant products, promotions and content.
Our Strategy
Our objective is to be the leading provider of enterprise e-business software applications and services that enable companies worldwide to build brand equity through direct customer interaction across multiple touch points.
Key elements of our product strategy are to:
. Enable consistent and personalized customer interaction across multiple touch points;
. Provide a comprehensive suite of e-business applications targeted at business line managers; and . Integrate operational and analytical applications to enable effective customer interaction and ongoing business improvements.
Key elements of our sales and marketing strategy are to:
. Target large, vertical markets where brand equity is paramount;
. Leverage relationships with systems integrators to focus on license revenues;
. Expand our international presence; and . Address smaller, or mid-market, companies through a subscription-driven business model.
We were formed in June 1998 as Blue Martini LLC, a Delaware limited liability company, and merged into Blue Martini Software, Inc., a Delaware corporation, in January 1999. Our principal executive offices are located at 2600 Campus Drive, San Mateo, California 94403 and our telephone number is (650) 356-4000. Information contained on our website shall not be deemed to be a part of this prospectus. "Blue Martini Software" is our registered trademark. This prospectus also includes trademarks owned by other parties.
The Offering
Common stock offered................................ shares Common stock to be outstanding after the offering .. shares Use of proceeds..................................... For operating activities, including expansion of our sales and marketing organizations, capital expenditures and other general corporate purposes, including general and administrative operations and the repayment of indebtedness.
Proposed Nasdaq National Market symbol.............. BLUE The number of shares of common stock to be outstanding after this offering is based on the number of shares outstanding as of April 15, 2000, and excludes:
. 5,906,400 shares subject to options outstanding as of April 15, 2000, at a weighted average exercise price of $2.32 per share;
. 2,445,000 shares subject to outstanding warrants as of April 17, 2000, at a weighted average exercise price of $4.94 per share;
. 9,950,100 additional shares that are available for future grant under our stock option plans as of April 15, 2000; and . 4,000,000 shares that we could issue under our employee stock purchase plan as of April 15, 2000.
Summary Financial Data
June 5, 1998 Three Months
(Inception) to Year Ended Ended March 31,
December 31, December 31, -----------------
1998 1999 1999 2000
(In thousands, except per share data)
Statements of Operations Data: Total revenues.................. $ -- $ 11,232 $ 241 $ 10,681 Gross profit.................... -- 5,084 128 3,902 Loss from operations............ (1,160) (10,181) (1,393) (11,441) Net loss ....................... (1,145) (9,928) (1,362) (11,381)
Basic and diluted net loss per common share................... $ (0.05) $ (0.43) $ (0.06) $ (0.45) Shares used in computing basic and diluted net loss per common share.......................... 22,000 22,964 22,000 25,108
Pro forma basic and diluted net loss per common share.......... $ (0.24) $ (0.23) Shares used in computing pro forma basic and diluted net loss per common share.......... 41,348 48,452
The following table presents a summary of our balance sheet as of March 31, 2000:
. on an actual basis;
. on a pro forma basis after giving effect to the conversion of our outstanding convertible preferred stock into 23,297,000 shares of common stock immediately prior to the closing of the offering; and . on a pro forma as adjusted basis to reflect the sale of shares of common stock at an assumed initial public offering price of $ per share after deducting underwriting discounts and commissions and estimated offering expenses.
Pro Pro Forma
Actual Forma As Adjusted
(In thousands)
Balance Sheet Data: Cash, cash equivalents and short-term investments............ $13,632 $13,632 Working capital......... 1,023 1,023 Total assets............ 27,788 27,788 Long-term obligations, less current portion... 602 602 Total stockholders' equity................. 6,537 6,537