idealab to sell stake in European subsidiary

Technology incubator idealab is looking to sell a stake in its nine-month-old European subsidiary, idealab Europe, the Financial Times reports.

The newspaper quotes David Ishag, managing director in Europe, saying that the broadening equity base was “a positive not a negative step”. He did however acknowledge that the move was partly because idealab wanted to concentrate on US business.

Last week, idealab said it had cut about 10 per cent of its staff in response to market conditions, but hoped to be able to place some of the affected employees at its affiliated companies. The cuts were from the company’s 170-strong staff in five different offices.

idealab had announced plans to go to IPO last year and raised $1bn in a private financing round in March.

In October the company announced that it would postpone the listing and focus on new company creation citing dramatic shifts in the market as one of its main reasons. Bill Gross, chairman and chief executive officer of idealab, said at the time: “We will continue to do what we have always done best, build great companies. We move forward with an even greater emphasis on creating innovative businesses that deliver sustainable, profitable growth over the long term. When the time is right, we will return to the public markets”.

Idealab’s portfolio includes weddingchannel.com, iExchange.com and eToys. It was not however involved in eToys Europe which recently closed its UK operation.