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Paytrust Goes Public
A winner of the "Most Likely to Go Public"
award at the 1999 New Jersey Venture Fair (see story, page 14) Paytrust.com,
has just announced its initial public offering, and a winner from
two years ago, ITXC, has offered its founders an opportunity to cash
out and other investors to buy in.
Paytrust is an Internet-based service enabling consumers to receive,
review, approve, and pay all bills electronically. Its parent company,
Secure Commerce Services, on Emmons Drive, had already raised $50
million from some prestigious investors, most recently Citigroup’s
e-City unit. It has an agreement with American Express to market the
Paytrust service to its 29 million members.
"Tell us who your billers are, and what the account is, and whether
it’s AT&T or your lawn service, we will do almost everything else
for you," said McLaughlin in an earlier interview (U.S. 1, August
25, 1999). "On the payment side it is like electronic banking.
On the presentation side — that is where we are completely different."
McLaughlin majored in finance and decision science at Wharton, Class
of 1987, and designed large-scale document transmission for such clients
as Motorola, Florsheim Shoes, IBM, and Martin Marietta. Paytrust is
his third start-up. His co-founder, Flint Lane, majored in computer
science at Rensselaer (Class of 1988) and worked at Andersen Consulting
and BrownStone Solutions. He met McLaughlin at the relational database
company, LogicWorks, when it was on Campus Drive (that firm is now
part of Computer Associates).
Other Logic Works alumni also work at Paytrust. John A. Yapaola, executive
vice president of business development, went to St. Peter’s College
and worked for a developer of broadband technology. Kenneth W. Zeng,
chief financial officer, former Logic Works controller and St. Bonaventure
graduate, has also been vice president of finance at Nettech Systems
on Alexander Road and an audit manager at Ernst & Young.
Additional officers: Lawrence R. Greenberg, chief technology officer,
was formerly chief information officer at Princeton eCom Corporation,
Don Licciardello’s electronic payment processing company that moved
from Research Park to College Road. A Rutgers graduate, Greenberg
came to Paytrust last October.
David S. Fortney, who joined the firm as chief development officer
last month, went to University of North Carolina and Stanford and
had been senior vice president at Nations Bank. Edward J. Youcum Jr.,
the general counsel as of last month, went to Temple and Villanova
and had been with Morgan Lewis & Bockius in New York.
The directors include Brian B. Applegate of Spectrum Equity Investors,
Pierric D. Beckert of American Express, R. Bradford Burnham representing
AT&T Venture Fund, John L. Connolly of Aralia Technology Partners,
and Gary E. Rieschel of Softbank Venture Capital.
In the first round of financing, the "friends and family"
round, the mother-in-laws of both Lane and McLaughlin chipped in up
to $35,000 and their siblings and parents also anteed up $10,000 apiece.
As of the date of one month ago the company had 88 employees: 25 in
operations, 19 in R&D, 14 in customer service, 16 in sales and marketing
and 14 in administration, human resources, and legal affairs —
plus 78 temporary personnel in operations at a site in Lawrenceville.
Lane has developed and tested his own method for scanning bills —
automated ways of identifying forms and of lifting information off
of the "scan line," the string of numbers along the bottom
of each bill. Thanks to this, Paytrust can include an image of the
original bill with the paper check. This cuts down on errors, because
a bill-payer might have more than one account. Patents are pending.
"Our technology reads and converts both the scanline and consumer
information," says McLaughlin. Neither Paytrust employees nor
consumers need to do any keystroking, and, he says, this cuts down
Nevertheless, the firm must contend with a patent challenge from Midwest
Payment, a bank in the midwest claiming rights to electronic bill
receipt and payment services. Paytrust’s patent is broader in scope
but just in case the Midwest patent holds, Paytrust would hope to
license it. Competition also comes from two lookalike sites: (http://www.statusfactory.com
(known as Cyberbills) and http://www.paymybills.com
The prospectus cites additional competition, including alternative
payment methods and other kinds of businesses — banks, stockbrokers,
and web portals.
For instance, CheckFree, the electronic bill processor, is buying
out its competition, TransPoint to the tune of $1 billion. And First
Union — which tried to sue Paytrust for offering to access First
Union’s customers’ accounts — has formed a consortium with Chase
and Wells Fargo to provide similar services to Paytrust. Even Intuit
announced it would start a competitive service.
B-30, Princeton 08540. Ed McLaughlin, president and CEO. 609-720-1818;
fax, 609-720-1819. Home page: http://www.paytrust.com.
Last week ITXC did a secondary offering of 4 million
shares of common stock at $85 per share. The stock jumped to $100
but is back to the mid 80s now.
Half of the shares are being sold by the company and half by stockholders,
including founder and CEO Tom Evslin. To provide Internet-based voice
and fax services ITXC deploys an actively managed network overlaid
on the Internet (ITXC.neta) plus an internet call completion service
over the Internet (WWeXchange Service). Its webtalkNOW! Service makes
ITXC.net available to portals offering web-based PC to phone calling.
Its carrier affiliates include China Telecom, Ameritech, Bell Atlantic,
Korea Telecom, and Pacific Gateway Exchange.
The offering is being managed by Lehman Brothers, CIBC World Markets,
PaineWebber, First Analysis Securities, and Kaufman Brothers. To get
a prospectus fax 516-254-7268.
ITXC started as a home office on Library Place, the home of Tom and
Mary Evslin (U.S. 1, September 17, 1997). Last November 7 it celebrated
its first "million minute day," carrying a million minutes
of wholesale Internet telephony traffic on just one day. In just four
months it had doubled its service and celebrated a "2 million
minute" day on Sunday, March 5. Also early in March it opened
its third Super PoP (point of presence), this one in Jersey City.
600 College Road East, Princeton 08540. Tom Evslin, CEO. 609-419-1500;
fax, 609-419-1511. Home page: http://www.itxc.com.
With its bouncing ball giveaways, JustBalls.com had
one of the most popular exhibits at last year’s New Jersey Venture
Fair, and it won the "People’s Choice" award. Founded two
years ago (U.S. 1, August 12, 1998) the Route 27-based firm has teamed
with EarthLink, an Internet service provider, to open a storefront
in Earthlink’s online shopping mall (http://themall.earthlink.net).
"The deal gives JustBalls.com a persistent presence at the on-ramp
of one of the Net’s most active user groups, says John Worby, vice
president of marketing for JustBalls.com.
Still privately held, JustBalls.com is the first and only retailer
to specialize in the sale of balls of every type. Its investors include
David Wetherell, CEO of CMGI and now board chairman; Bob Davis, CEO
of Lycos, Blue Rock Capital, Jafco America, and Bantry Bay Ventures.
08528. Jim Medalia, president and founder. 609-497-2400; fax, 609-497-0113.
Home page: http://www.justballs.com.
08648. John H. Martinson, managing partner. 609-896-1900; fax, 609-896-0066.
Home page: http://www.edisonventure.com.
Ross Martinson, general partner and CFO of the fund, has received
a license to operate the fund as a Small Business Administration Small
Business Investment Company (SBIC) program. The SBIC license offers
venture capital funding through privately owned and managed investment
firms. Edison prefers to invest in businesses doing software development,
communications, and electronics technology. Under this program the
fund can offer from $1 million to $6 million in venture capital.
"Venture capitalists like Edison Venture Fund can supplement their
own private investment capital with funds borrowed at favorable rates
through the federal government," says Thomas M. Bettridge, of
the SBA. "The important part of this program is that it puts capital
in the hands of emerging companies. The tax revenues generated from
successful SBIC investments more than cover the cost of the program."
For the fund’s portfolio of companies Martinson cites growth rates
that average more than 30 percent per year and says the fund has invested
in more private companies in the five state area than any other venture
08540. Peter Kiesewetter, owner. 609-520-8877; fax, 609-520-9633.
The three-person appraisal firm expanded from Suite F-40 to a different
suite in the same park. Cornerstone appraises damage for insurance
companies and can also contract to get the repairs done. Peter Kiesewetter,
who graduated from Susquehanna University in 1983, worked as a project
manager for builders, and then did insurance appraising and restoration
for another company in North Jersey before opening this firm.
Lawrenceville 08648. Jay Trautman. 609-620-0220; fax, 609-620-0222.
Praelux was bought by Amersham Pharmacia Biotech on February 11 and
is now a wholly owned subsidiary. The buying organization is 65 percent
owned by Nycomed Amersham and 45 percent by Pharmacia Upjohn. Praelux
was incubated first in the offices of venture capitalist Robert Johnston
and then in leased space at the Sarnoff Center, and was formerly known
as SEQ Ltd. (U.S. 1, May 14, 1997).
The former president and CEO, David Livingston, has left, but Praelux
will keep its name and laboratories on Princess Road, says Jay Trautman,
one of the founders. Praelux has built what Trautman says is the "world’s
first fluorescence confocal microscope that can be applied to high
throughput secondary screening." It will support the parent company’s
primary drug screening system, Leadseeker Homogeneous Imaging (http://www.apbiotech.com).
Suite 206, Princeton 08540. Henry D. Moore, CEO. 609-921-3904; fax,
609-921-7510. Home page: http://www.internetsoftcorp.com.
Henry D. Moore majored in business at Georgia Southern, Class of 1984,
and has worked at McGraw Hill, AT&T and did consulting at Lucent Technologies.
He is network certified in such applications as NT and has training
in Cisco and Bay routers. "We look at what the company sells and
devise a strategy to promote that in the cyber world," says Moore.
"We are business consultants first. We also can market the site."
Princeton Junction 08550. Jean Golden, president. 609-890-2277; fax,
This travel agency has merged with Premier Travel, and moved from
2273 Route 33 to 64 Princeton-Hightstown Road. The company will eventually
assume the name of Premier Travel.
North, Cranbury 08512. Mark E. Wojcik, general manager. 609-395-9700;
fax, 609-395-8824. Home page: http://www.vectorcorporation.com.
Vector East Coast Laboratory has changed its name, according to a
spokesperson, to better reflect what the company does — test pharmaceutical,
chemical and industrial products for an Iowa-based company. It does
process technology and development of clinical and commercial manufacturing
of tablets, pellets, and capsules.
Floor, Ewing. James O’Donnell, vice president. 609-406-1300; fax,
609-406-9711. Home page: http://www.okpcm.com.
From Crossroads Corporate Center this construction management and
engineering company has moved to a smaller space on Scotch Road. A
Dames & Moore Group company, it does program management, construction
management and engineering, and site inspection.
08543-5226. Robert W. Bacso, managing partner. 609-924-0808; fax,
609-452-1888. Home page: http://www.hillwallack.com.
Senior associate Mark M. Roselli has been named a partner. A former
campaign manager for Congressman Chris Smith (R-NJ), Roselli has been
a member of the firm’s litigation and trial and insurance divisions.
609-924-7500; fax, 609-924-7588.
After a stint at a temporary office in Lambertville, the entertainment
lawyer has moved from Main Street in Kingston to a larger space at
115 Harris Road, near the Medical Center. The phone and fax are the
Cranbury 08512. 609-860-2800; fax, 609-860-9555. Home page: http://www.thecore.com/felmeister.
Attorney Robert A. Felmeister moved from 601 Ewing Street, Princeton
Professional Park, to Eastpark Boulevard and has a new phone and fax.
He has a general practice with an emphasis on real estate.
Amboy Bank Building, Hopewell 08525. Carol L. O’Connell, mediator.
609-466-2540; fax, 215-862-5942.
The mediation and co-mediation service moved from Princeton Avenue
to the Amboy Bank building on East Broad Street.
Center, Building 11, Princeton 08543. Joel D. Rosen. 609-514-1020;
The attorney, whose practice includes corporate and construction litigation,
has moved to 3490 Route 1 from 14 Washington Road. The phone and fax
Pike, Building 3D, Suite 200, Lawrenceville 08648. Joseph Markowitz,
managing partner. 609-896-2660; fax, 609-896-3184.
After 23 years as Markowitz & Zindler this firm has changed its name.
Michael Zindler is now with Teich, Groh & Frost, and the lawyers here
are Joseph and Joshua Markowitz (father-son), Christine Gravelle,
Linda Schwimmer, and Howard Teichman.
Mercerville 08619-4492. Barry W. Frost, partner. 609-890-1500; fax,
Michael Zindler has added his name to Teich, Groh & Frost.
08540. Stuart J. Lieberman, partner. 609-497-3930; fax, 732-355-1310.
Stuart J. Lieberman and Shari Blecher opened a firm to focus on personal
injury and environmental law. Lieberman is a 1979 graduate of Rutgers
who went to Capital University Law School in Columbus, Ohio. He had
been a shareholder at Goldshore and Wolf and Blecher had been associated
with that firm as well.
Lieberman was a deputy attorney general in the department of environmental
protection and co-author of New Jersey Brownfields Practice. He has
a syndicated column at http://www.realtytimes.com. Blecher went
to SUNY Binghamton, Class of 1995, and the Cardozo School of Law.
08901. 732-846-8909; fax, 732-636-3358.
Rajat Gupta has joined Spevack & Cannan at 525 Green Street in Iselin
and has a new phone 732-636-3030. He focuses on personal injury and
08542. Peter W. Hegener, chairman. 609-252-9040; fax, 609-252-9042.
Home page: http://www.eparkprinceton.com.
On March 8 this company’s E-mail address was incorrectly printed as
www.epark.com. In fact, it is www.eparkprinceton.com. Hallbridge Real
Estate Group will be leasing the building.
at the Sarnoff Corporation.
actor, Barnes owned Refine Design, a graphic arts studio in Pennington,
and performed with several theater companies, including Off-Broadstreet
Theater in Hopewell and the Langhorne players. He was also a volunteer
for Eden Family Services, the social service agency for people with
autism, and was a member of the committee that created the elaborate
motifs for the annual Eden Dreams gala.
Corrections or additions?
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