WeddingChannel Commanding a Sizable Dowry
The suitors are lining up for WeddingChannel.com--and they’re offering a lot more than flowers.
This week, the Los Angeles-based Internet commerce firm is expected to announce that the private investment fund of multibillionaire Michael Dell, chief executive and founder of Dell Computer Corp., has invested an undisclosed sum in the company. 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 company’s 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, it’s really powerful,” said Tim Gray, 31, chief executive and co-founder of WeddingChannel.com, who grew up in Valencia. “They are helping us put deals together and give us access to anyone we want to talk to.”
Raj Dhaka, 30, is the other co-founder and the firm’s president.
The Web site offers a bridal registry, travel planning, a feature that allows couples to create personalized sites, wedding tips, local business directories and bridal fashion information.
The site, https://www.weddingchannel.com, gets about 5.5 million page views a month and the company hopes the financings will help it capture a bigger slice of the fragmented $35-billion-a-year bridal industry. 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. He says they are hiring new people every week.
The capital infusion comes just after WeddingChannel.com signed a lucrative marketing deal with Bride’s magazine.
“Bride’s magazine is the 800-pound gorilla in the bridal industry,” said Bill Elkus, head of Idealab Capital Partners, a $105-million fund. “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. Henry’s “The Gift of the Magi.” San Francisco-based Della & James is backed by Silicon Valley venture capital giant Kleiner Perkins Caufield & Byers.
While TheKnot.com is up and running with a full slate of features, Della & James is expected to be officially launched in May or June. The firm was started by two women who dropped out of Stanford business school to pursue the idea.
“We looked around at what others were offering in terms of gift registry and they just didn’t get it. They didn’t see that brand was important,” said co-founder Jenny Lefcourt, 29. Jessica DiLullo, 26, is the other founder.
“The average bride is 26 years old, and now she’s supposed to go out and pick formal entertaining ware worth $10,000,” said Lefcourt. “We help them through that. Some of these other sites don’t get it--they don’t understand that this is the day brides always dream of. Just because it’s the Internet doesn’t mean she doesn’t deserve that richness of experience.”
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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. Lefcourt is also negotiating with retailers.
Meanwhile, other Los Angeles-area firms tapping venture funds include NetZero, a free Internet service provider. 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. Since its launch in October, more than 300,000 subscribers have signed up, according to the company.
The firm’s major advertisers include Nissan, BellSouth, EBay and NextCard Visa.
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Debora Vrana covers investment banking and the securities industry for The Times. She can be reached by e-mail at debora.vrana@latimes.com or by mail in care of Business Section, Los Angeles Times, Times Mirror Square, Los Angeles, CA 90053.
