BizSpace Announces $3.5 Million in Equity Financing

Posted on February 4, 2000

BizSpace, Inc. has announced that it has raised $3.5 million in an equity financing round led by October Capital, the venture capital fund formed recently by entrepreneur Lance LeMay and Ron LeMay, President and Chief Operating Officer of Sprint. Other investors in the round include St. Joseph, Mo.-based News Press & Gazette Co.; George H. Young III, Managing Director, Lehman Brothers' Global Communications & Media Group; and The New Economy Fund.

BizSpace raised $1 million last summer from private investors. The Internet company develops and operates websites that target specialized, cohesive industry micro-segments, providing daily news, industry information, and online purchasing opportunities to executives within these niche vertical markets. BizSpace currently owns and operates nine business-to-business websites serving micro-segments within the telecommunications, healthcare, engineering and construction industries. BizSpace President and CEO Martha Gershun says the company, which has grown from 12 staff members in June 1999 to 36 today, will have 20 websites in operation by the end of 2000.

``Our websites generate more than 155,000 sessions per month, representingmore than 38,000 unique monthly visitors,'' reports Gershun. ``Our 1999 advertising and e-commerce revenue doubled in one year to nearly $1 million and, one month into the new year, we already have more than $800,000 in advertising under contract for 2000.''

BizSpace was founded in 1996 by Don Goldman, Chief Operating Officer of Birch Telecom, and David E. Scott, President and CEO of Birch Telecom. Gershun joined the online publisher in June 1999 and has led the company through its recent rapid expansion. The selection of Kansas City for BizSpace headquarters is a reflection of the recent increase in Internet ventures located in smaller markets.

Gershun says she expects BizSpace to continue its growth by adding one new website each month. The increase in online niche websites such as those developed by BizSpace is being fueled by the frustration of executives who find traditional print media inadequate to serve their need for timely, user-friendly information, according to Gershun.

``The high fixed costs of print publishing limits the ability of trade periodicals to specialize in smaller industry segments,'' notes Gershun. ``Print publications can't meet the demand for real-time information updates, directories published once a year are quickly obsolete, and print publications are difficult to search, with limited ability todeliver high-volume reference information.

``The economics of web development allow Internet publications to targetsmall industry segments that would be unattractive to traditional print publishers. Industry news can be updated on a daily basis in real time, vast amounts of information can be provided in an accessible format and easily searched and the Internet offers the added advantage of allowing professionals to communicate with each other about topics of interest.''

Currently, BizSpace websites include CLEC.com, theIPsite.com, Cable-Broadband.com, DSLdigest.com, CallCenterBiz.com, RadiologyBiz.com, SurgeryBiz.com, HITbiz.com, and AirportPlanning.com. BizSpace, Inc. develops and operates business-to-business websites that target highly focused vertical industries in the areas of telecommunications, healthcare, engineering and construction. Founded in 1996, BizSpace is based in Kansas City, Mo.