Net starters surf for £500m

By SCOTT WILKINSON
Updated:

 

A rash of Internet start-ups is set to raise up to £500 million from stock market investors this summer.

Corporate financiers warn that once electrical retailer Dixons has hived off its Internet service provider Freeserve for up to £800 million, dozens of smaller ventures will follow.

QXL, an online auction house, is tipped to be among them. Based on a model pioneered by American firm E-Bay, QXL matches buyers and sellers of electrical, computer and sports equipment. It was created by Tim Jackson, a former Financial Mail journalist. Consumers make online bids that often start as low as £1. E-Bay is valued at £11.5 billion.

The Internet Investors Journal, which supplies financial information on public companies in 30 countries, is also heading for flotation, according to sources close to the company.

A leading technology financier said: 'I have seen at least five Internet firms planning to issue prospectuses by the end of the year. We believe at least three of them will make it to market. Other finance houses must be doing similar business.'

Dixons promises that the Freeserve prospectus will fill out the sketchy information on its record, beyond having 1.5 million subscribers.

But according to George O'Connor of broker Granville: 'There is a danger the market will become clogged. I'd want to get companies to the market before the end of the year.'

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