Cash For Calico

If an initial public offering is judged by the customers and partners a company keeps, Calico Commerce shouldn't have any problem attracting Wall Street's interest.

Calico, which makes e-commerce software for corporations, will offer 3.93 million shares this week with a price range of $12 to $14.

So, why does Calico have the wind at its back? For starters, it's one of those so-called infrastructure IPOs. If you haven't noticed, most IPOs dealing with Internet infrastructure, such as networks or e-commerce software, have done well. "Dot coms" have become almost passe when it comes to IPO performance.

Calico's pedigree also isn't too shabby. Goldman Sachs is the lead underwriter, with an assist from Hambrecht & Quist. Kleiner Perkins Caufield & Byers was one of Calico's venture capital firms, and partner Bernard J. Lacroute is on Calico's board.

And then there's Calico's customer list. Calico (Proposed ticker: CLIC) counts Best Buy, Cabletron, Cisco Systems, Dell Computer, Gateway, Merrill Lynch and Nortel Networks among its main customers. Dell also is taking a stake in Calico at the IPO.

Those relationships make Calico among the most likely to make a big IPO splash, according to David Menlow of the IPO Financial Network, a research firm. "Calico has all the buzz phrases," he said. "They have our highest ranking."

Calico's eSales Suite gives companies customized information and flags potential hiccups in the sales process. It also supports multiple sales channels. Dell uses Calico to configure enterprise sales, and Nortel hooks up with customers with the software.

Menlow also said Calico has solid revenue growth. For the year ended March 31, the company reported sales of $21.4 million and a loss of $15.2 million. In 1998, Calico's sales of $11.8 million and a loss of $5.5 million. For the quarter ended June 30, sales also jumped significantly compared with a year ago.

But despite the pedigree and partnerships, Calico faces some risks. It could be lumped in as yet another e-commerce software provider and has yet to turn a profit.

Menlow, however, is confident Calico can differentiate itself from the pack.

"You can't ignore the growth," he said. "And the net [income] will come."