Chicago Sun Times
December 17, 1999
BY HOWARD WOLINSKY BUSINESS REPORTER
Dell Computer and Microsoft Corp., the computer industry giants, are major backers of divine interVentures, the holding company of Internet start-ups that is attempting to give Chicago's tech economy a boost, documents filed with the Securities and Exchange Commission showed Thursday.
Of the $400 million divine has raised, Dell Computer, the leading computer manufacturer, has booted up $100 million, according to divine's SEC filing in preparation for a $250 million public share offering next year.
Microsoft, the software giant, invested $25 million in divine, which was founded by software mogul Andrew J. "Flip" Filipowski.
Divine aims to raise $3 billion to $4 billion over the next five years.
The SEC filing reveals that divine's investors include a mix of new economy and old economy Chicago business leaders and companies.
These include Robert Bernard, chairman of Whittman-Hart Inc., the Chicago Internet services company; Michael Birck, chairman of Tellabs Inc., the Lisle telecommunications manufacturer; William Lederer, founder of Minotaur Capital Management and former chief executive of Art.com; Jeffery Jacobs, president of Harpo Entertainment Group, which produces the Oprah Winfrey Show; Gregory Jones, chairman of uBid, Inc, the Chicago-based Internet auction site; Larry Levy, co-founder of Levy Restaurants, the Chicago-based nationwide food service company; Teresa L. Pahl, chief executive, Aon Enterprise Insurance Services; John Rau, president of Chicago Title & Trust Corp.; Mark Tebbe, chairman of Lante Corp., the Chicago Internet services company, and William Wrigley, president of the chewing gum company.
In addition, several Filipowski associates from his old company are investors in divine. Last summer, Filipowski sold Platinum Technology, the Oakbrook Terrace computer infrastructure software company, to Computer Associates for about $3.6 billion, the largest sale ever of a software company.
Since then, Filipowski has been beating the drum for divine and also for building Chicago into a hub for business-to-business Internet companies.
According to its prospectus, divine intends "to capitalize on the significant growth in the B2B [business-to-business] e-commerce market."
It cites projections by Forrester Research that inter-company trade of goods and services over the Internet will grow from $43.1 billion in 1998 to $1.3 trillion in 2003. In addition, according to the Gartner Group, e-commerce related information-technology investments are expected to account for half of the estimated $3.5 trillion in information technology spending in 2003.
Divine has invested in 19 business-to-business Internet companies, many of them based in divine's incubator in Lisle. Filipowski intends to move many start-ups to Chicago, though some companies divine supports will be situated elsewhere.
Among the companies that are part of divine's "Internet zaibatsu" are dotspot inc., which will develop and lease facilities and provide real estate services for Internet start-up companies; OpinionWare.com Inc., which is developing technology to gather and analyze the opinions of large public and private online communities; Synetrics Inc., which has a suite of integrated accounting and financial services designed to help small- and mid-sized companies get products and services to market quickly, and Xqsite Inc., which provides Web site design, deployment and implementation for business-to-business e-commerce companies.
Divine is converting a 7.2-acre site on Goose Island in Chicago into a $62.9-million incubator, known as Habitat Goose Island, to nurture Internet start-ups.