Prospectus Summary
You should read the following summary together with the more detailed information regarding our company and the common stock being sold in this offering and our financial statements and notes to those statements appearing elsewhere in this prospectus.
Onvia.com, Inc.
We are the leading business-to-business emarketplace for small business buyers and sellers. Our emarketplace is designed to help small businesses succeed by providing a single online destination where small businesses can buy and sell services and products, exchange valuable information and access productivity tools. We have designed our emarketplace to incorporate all of these functions so that small businesses can conduct e-commerce and exchange information without leaving our web site. By aggregating a large and targeted audience of small businesses, our emarketplace provides a new and powerful sales channel for both small and large vendors to the small business market.
Businesses are increasingly using the Internet to communicate and transact commerce with their partners, suppliers and customers. According to Forrester Research, the U.S.-based business-to-business e-commerce market is expected to grow from $109 billion in 1999 to $1.3 trillion in 2003. To facilitate the electronic exchange of information, services and products, businesses are beginning to form electronic marketplaces, or emarketplaces, that aggregate buyers and sellers in a central Internet destination.
As small businesses, which we define as businesses with fewer than 100 employees and income-generating home offices, increasingly rely on the Internet, we believe that a significant market opportunity exists to provide small businesses with an emarketplace specifically catered to their needs. According to International Data Corporation, or IDC, there are approximately 29.6 million small businesses in North America today. Small businesses account for roughly half of the United States gross domestic product, according to the U.S. Small Business Association. We believe that the growth in the number of small businesses, which IDC estimates will reach 38.5 million by 2002, and in the volume of small business e-commerce, which IDC estimates will reach approximately $107 billion in 2002, will drive the need for an emarketplace that offers sellers a channel to reach the large, fragmented market of small business buyers and provides these buyers with a single Internet location to meet all of their needs.
Our emarketplace currently consists of:
. a small business services trading hub, which includes more than 6,500 businesses that act as suppliers across 50 services in our request for quote network, a network which enables buyers to submit electronically requests for quotes for various business services and sellers to respond with pricing and fulfillment information;
. more than 25,000 products and nine critical business services selected for the particular needs of small businesses that can be purchased quickly and conveniently through our "Buy Now" system; and . a collection of timely news, information, editorial content and business tools designed to help small businesses enhance their operations.
We intend to build on our leadership position as the first comprehensive emarketplace for small businesses by expanding our service, product and information offerings to become the single source for all small business needs. We believe that by expanding our offerings we will attract more small businesses to our emarketplace, creating additional marketing opportunities for our sellers. We believe that this will create a network effect in which the value of our emarketplace increases with the addition of each participant.
Onvia.com was incorporated as MegaDepot, Inc. in Washington in March 1997. In February 1999, we changed our name to MegaDepot.com, Inc., and in May 1999 we changed our name to Onvia.com, Inc. We intend to reincorporate in Delaware prior to the closing of this offering. Our principal executive offices are located at 1000 Dexter Avenue, Suite 400, Seattle, Washington 98109, and our telephone number is (206) 282-5170. Our web site is located at www.onvia.com. The information contained on our web site is not part of this prospectus.
The Offering
Common stock offered................................ shares Common stock to be outstanding after the offering... shares Use of proceeds..................................... For general corporate purposes, including working capital. See "Use of Proceeds." Proposed Nasdaq National Market symbol.............. ONVI This table is based on shares outstanding as of September 30, 1999 and excludes the following shares:
. 631,319 shares issuable upon exercise of warrants outstanding as of September 30, 1999 at a weighted average exercise price of $1.85 per share;
. 4,478,016 shares issuable upon exercise of options outstanding as of September 30, 1999 at a weighted average exercise price of $0.30 per share;
. 4,008,872 shares of common stock available for future grant under our 1999 stock option plan;
. 300,000 shares of common stock available for issuance under our 2000 directors' stock option plan;
. 300,000 shares of common stock available for issuance under our 2000 employee stock purchase plan; and . 1,689,701 shares of Series C preferred stock issued in December 1999.
Unless otherwise indicated, the information in this prospectus reflects the number of shares outstanding on September 30, 1999 assuming:
. the conversion of all outstanding shares of preferred stock into common stock upon the closing of this offering;
. our reincorporation into Delaware which will be effected prior to the closing of this offering;
. the filing of our amended and restated certificate of incorporation;
. the exercise of warrants to purchase 384,624 shares of our common stock that will expire if not exercised before the closing of this offering; and . no exercise of the underwriters' over-allotment option.
Summary Consolidated Financial Data
March 25,
1997 Nine Months
(inception) Ended September
to Year Ended 30,
December 31, December 31, ----------------
1997 1998 1998 1999
(in thousands, except per share data)
Consolidated Statements of Operations Data: Revenue........................... $ 62 $1,037 $ 653 $ 13,168 Gross margin...................... 15 (45) 45 (2,540) Total operating expenses.......... 146 623 323 13,337 Loss from operations.............. (130) (669) (279) (15,877) Net loss.......................... $ (130) $ (672) $ (281) $(16,202) Basic and diluted net loss per common share..................... $(0.03) $(0.17) $(0.07) $ (2.84) Basic and diluted weighted average shares outstanding............... 4,000 4,000 4,000 5,695
September 30, 1999 Pro Forma Actual As Adjusted (in thousands)
Consolidated Balance Sheet Data: Cash and cash equivalents................................... $26,037 $ Total assets................................................ 38,199 Long-term debt.............................................. 5,465 Total stockholders' equity.................................. 22,878
The pro forma as adjusted information in the above consolidated balance sheet data table is adjusted to reflect the sale of shares of common stock offered by us at an assumed initial public offering price of $ per share, after deduction of the estimated underwriting discounts and commissions and estimated offering expenses, and the exercise of warrants to purchase 384,624 shares of our common stock that will expire if not exercised before the closing of this offering.
See note 1 of the notes to our consolidated financial statements for an explanation of the determination of the number of weighted average shares used to compute net loss per share amounts.