USinternetworking Inc, the ambitious application hosting company has filed to go public with an initial public offering to raise up to $86.3m before expenses. The announcement comes about three weeks after it closed a second round of funding in which it raised $62m (CI No 3,972). The Annapolis, Maryland-based start-up provides access to financial, customer service, sales and marketing and ERP applications for a monthly fee, in a service called the internet managed application portfolio, or iMap. It targets medium-sized businesses for whom it would not be economical to run such applications from their own servers. The business was only formed a year ago and immediately launched an audacious and unsuccessful $400m bid for PSINet. It went on to raise $95m in its two rounds of 1998 funding and last summer US West, the sixth-largest US local phone company took a minority stake in the company. The largest shareholder is Grotech Capital Group in Timonium, Maryland. From incorporation on January 14 through to the end of 1998, USi recorded net losses of $32.2m, on revenues of $4.1m and cash and equivalents on December 31 stood at $43.8m. USi is in a market that Forrester reckons will have grown from $1bn in 1997 to $21bn in 2001. The offering is underwritten by Credit Suisse First Boston Corp, Bear Stearns & Co, BT Alex Brown Inc and Legg Mason Wood Walker Inc.
