Zengine: Timing Is Everything
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Estimates were that e-consulting firms would be riding a big wave of spending - with revenues of $425 million in 1998 to $4.4 billion by 2003. However, with dot-com companies being shut-off from capital infusions, the revenues of e-consultants have definitely been impacted - as have the stock prices.
True, e-consultants are making transitions towards traditional companies. But this takes time.
Another problem for e-consultants is the sheer number of companies. Expect consolidation to hit the industry.
So it seems unusual that Zengine, an e-consultant, wants to go public. Then again, the company has a small banker: William Blair. The offering is for 4.3 million shares at the price range of $13-$15. The proposed ticker symbol is ZNGN.
The Zengine technologies are centrally stored and are called KORE. KORE can be leveraged into future projects, so as to save time (hey, why reinvent the wheel?)
In all, the company has 15 e-commerce clients. The top client is Miami Computer Supply (MCSi), which accounts for 48% of revenues. MCSi is also the parent company of Zengine.
What's more, Zengine did not start its operations until the fourth quarter of 1999. Since then, revenues have reached $5.1 million. Operating losses were $200,000.
Perhaps last year Zengine would have had a successful IPO. But right now, investors are extremely negative on the sector. In fact, all e-consulting firms that went public in 2000 are selling below their offering prices. So, expect Zengine's IPO to also experience problems.