Two Softbank venture capital firms Thursday took a minority interest in Toysrus.com, investing $57 million into the online arm of the giant toy retailer.
Under the agreement, Softbank’s Venture Capital and Capital Partners
branches paid $10 million for 1.2 million shares of Toys “R” Us common stock
at $13 per share.
Rex Golding, managing director of Softbank Venture Capital, will join the
Toysrus.com’s board of directors and Gary Rieschel, executive managing
director of the VC firm will serve as observer.
Toysrus.com will use the money for development.
During the last few months
of 1999, Toysrus.com became one of the fastest growing e-commerce sites, despite
problems in filling order requests. According to Media Metrix,
Toysrus.com was the No. 5 most visited e-commerce site overall during the
holiday season. In late November, the company became the No. 1 bricks-and-mortar site, the No. 1 online toy site, and the No. 1 shopping
destination site for women — all with a marketing investment that was a
fraction of its competitors.
“The combination of our assets and experience in children’s products with
Softbank’s Internet expertise will allow us to create a world-class
e-commerce platform,” said John Barbour, chief executive officer of
Toysrus.com.
Last week, Softbank joined World Bank in a $500 million initiative to
incubate Net companies in 100 developing countries. The giant currently
holds stakes in 300 Internet companies throughout the world.