WeddingChannel Commanding a Sizable Dowry
Summary
The investment by New York-based MSD Capital is expected to be inked this week.That comes on the heels of a $12-million venture capital infusion WeddingChannel.com received from three high-profile investors, giving the fledgling firm more clout in the competitive online bridal market.Founded in 1997 by two friends who met in law school--they got the idea for the company after one got married in 1996--WeddingChannel.com is betting that couples, especially younger ones, will find wedding planning on the Internet comfortable and convenient.The $12-million investment, the companys third round of financing, came in late February from Goldman, Sachs & Co., a venture fund run by former American Express Chairman Jim Robinson and Idealab Capital Partners, a Pasadena venture fund.When we look at our investor group now, its really powerful, said Tim Gray, 31, chief executive and co-founder of WeddingChannel.com, who grew up in Valencia. The privately held firm does not disclose its revenue or losses.Eventually, WeddingChannel.com plans to help couples with their consumer needs associated with the stages of life that typically follow a wedding, such as buying a first home and having children, Gray said.Later this year, WeddingChannel.com is expected to join other local Internet firms such as GeoCities by launching an initial public stock offering.Gray, who recently moved his company and its 35 employees to a downtown Los Angeles office tower, believes Southern California is home to a blossoming Internet industry. This is a great endorsement.WeddingChannel.com was launched with $500,000 in seed financing from Idealab, an Internet incubator that has jump-started a growing stable of successful companies, and its affiliate, Idealab Capital Partners.Last May, the firm got another endorsement in the form of a $4-million investment from MacAndrews & Forbes Holdings Inc., in which billionaire investor Ronald Perelman holds a major stake.But WeddingChannel.com has several rivals in the electronic-commerce arena, including New York-based TheKnot.com and Della & James, a Web site named for the two characters in O. Henrys The Gift of the Magi. Just because its the Internet doesnt mean she doesnt deserve that richness of experience.Since the bulk of revenue in the wedding-site niche is expected to come from advertising and fees related to the online registry, the three companies will probably face stiff competition from the large department stores that already have Web registries and more familiar names.Gray says his firm is negotiating with major retailers to sign deals that, for example, would allow a couple who registers at the Pottery Barn to have their selections immediately appear on the WeddingChannel.com site. The Westlake Village firm recently received $11.5 million from an investor group led by Redwood City, Calif.-based Draper Fisher Jurvetson.Jennifer Fonstad, a specialist in high-growth businesses with Draper, will take a seat on the NetZero board.Adopting a strategy similar to network television and radio, NetZero offers free Internet dial-up and e-mail services, while drawing revenue from on-screen advertising.