SECTION E: THE PREMIER e-LEAGUE - As the old values of a sound business model and profits reassert themselves, Bain & Company charts the survivors, the thrivers and the dazzling new entries in our e25 league table

SECTION E: THE PREMIER e-LEAGUE - As the old values of a sound business model and profits reassert themselves, Bain & Company charts the survivors, the thrivers and the dazzling new entries in our e25 league table - This is the third e25 index that we

Last Updated: 31 Aug 2010

This is the third e25 index that we have produced with Bain & Company. The three months since the last have been more than a little turbulent in the world of British e-commerce. No sooner did the newly emerging sector acquire its first nationally recognised figurehead,'s ubiquitous Martha Lane Fox, than it promptly seemed to be on the skids as markets throughout the world took fright over how far the revolution is really able to go. The values of high-tech stocks and shares plummeted and the talk in the media was about nothing but bursting bubbles.

But the clicks go on. The violent movement of the Nasdaq and the Techmark indices has not been reflected by widespread corresponding plunges in the e25, although there have been notable changes in fortunes (11companies in the index have now undertaken IPOs, eight of which have made public offerings since the last e25). There are three new entrants - one of them, Interactive Investor International, going straight up to number four - and many strong risers.

It is worth reiterating what the e25 attempts to do. The table establishes rankings by looking at six separate criteria, which we divide into two groups of three. The first three - concept, innovation and execution - are concerned with the strength of the idea itself. The second group - financing, profile and traffic - are about how successful that idea is proving in terms of attracting investment, press coverage and, most importantly, customers.

There have been some changes in the methodology since the last e25. It was felt that too much weight was being given to profile (media attention) and this has been reduced. This sort of fame is of less importance to business-to-business models than business-to-consumer, generating uphelpful B2C bias. At the same time as the internet space is finally starting to become more like the real world, Bain has moved away from recognising page impressions and unique users towards revenue and that holy grail in land - profits. (We estimate that 85% of the e25 still lose money.)

Gerry Mulvin, partner in charge of e-commerce at Bain, observes of the past three months in the UK web space: 'The market has begun to correct itself, exposing weaker business models, testing management teams and forcing most internet start-ups to rethink the way they are conducting business.

'The market now places a much higher emphasis on revenues and profits. Since January, the market capitalisation of public B2Cs in our index has fallen by more than 50%, and B2Bs by around 30%. Predictably, venture capital has become much more expensive for internet start-ups, particularly B2Cs. We have noticed that this new, harsher environment has led to some seemingly desperate moves by many start-ups: entry into completely unrelated business areas and faster expansion into other, less developed markets.

'The question is,' he adds, 'who will the eventual winners be? We continue to believe that the players most likely to survive and prosper are those with the best management teams, proprietary business models, deep content and/or a strong focus on business fundamentals (ie, revenues and profits). We think that is reflected in this latest e25.'

Our number one remains the same: QXL is at the top of the pile for the second quarter running and it has been very busy consolidating its position. It is now the leading pan-European consumer online auction house and has been spending some of the money garnered from last year's IPO to make sure that it stays as such. It has forged an exclusive deal with Tesco, is getting into WAP and has been buying auction operations all over Europe, especially in Scandanavia.

Interactive Investor International (iii) has come into the e25 at number 4. The personal finance web site was founded way back in 1995 and has a classic first-mover advantage in what is a crowded area, with competitors such as Motley Fool and Hemington Scott. Its IPO in February was the most successful public offering of a net company to date and its founder Sherry Coutu initially realised a paper fortune of pounds 80 million. It is a mark of its success that the cost of advertising on its web site is one of the highest around.

The next newcomer, 365 Corporation, is a long way back at number 19.

The consumer sports and entertainment portal was founded by Danny Kelly, former editor of Q magazine and NME, and deals in what it calls 'passion centres' - football, cricket, rugby, chat and lonely hearts. It has multiple revenue streams, of which the internet is only one. It is significant that a high proportion of sales still comes from its premium-rate telephone business.

The third entrant is Shopsmart, which has just squeezed in at number 25. Co-founded by Daniel and Leo Gestetner, Shopsmart is a simple but effective independent shopping portal. It has links to 1,600 UK retailers and offers a useful price scan comparison tool. It is already the sixth most visited retail site in the country.


WGSN (see accompanying profile) has climbed into second spot on the strength of its idea. It always scored high on concept and execution but it now tops both categories as its considerable success and near unique appeal become more apparent. From fashion to sport: Sportal has climbed 10 places to number three. It is gaining more exclusive contracts - including the e-rights to the Euro 2000 football tournament - adding innovative products and improving the appearance of its web sites. All of which is generating more traffic to add to a massive (and loyal) existing audience, who no doubt surf with a mouse in one hand and a can of lager in the other. Other notable risers include virtualinternet, the web host, nCipher, the encryption specialist, and jungle, the ever-lively software and games e tailer.


Our first e25 number one,, has slipped a further three places to fifth-equal. The debacle over its share issue did it no favours and showed that huge brand awareness may be one thing, but brand equity is another. As Martha Lane Fox admitted, when it came to raising money on the market, her company could not have been 'more last minute if we'd tried'. However, its business fundamentals are good and the company managed to put pounds 125 million in the bank to grow and strengthen its operations.

Other fallers include Internet Exchange, whose net cafes now appear under greater competitive threat, Orchestream, iCollector and Finally, we have lost three companies altogether -, and Boo started out with such promise but was not helped by the loss of its new finance director after only two months in the job. We hope that all three will be able to climb back in before long.

< company="" concept="" innovation="" execution="" 1="""" auctions="" 15.0="" 4.0="" 12.4="" 2="""" fashion="" infomediary="" 21.3="" 6.0="" 16.0="" 3="" sportal="" sports="" portal="" 16.3="" 5.0="" 14.6="" 4="" iii="" personal="" finance="" portal="" 11.9="" 3.0="" 13.0="" 5="" late="" bookings="" 12.5="" 6.0="" 14.7="" 5="" music="" 21.3="" 9.5="" 14.4="" 7="" netbenefit="" e-solutions="" 15.0="" 5.0="" 14.0="" 8="" virtualinternet="" web="" hosting="" 15.6="" 5.5="" 14.0="" 9="" gameplay="" games="" 16.3="" 6.0="" 15.2="" 10="" ncipher="" encryption="" 17.5="" 6.0="" 14.0="" 11="""" gambling="" 11.3="" 5.0="" 15.8="" 12="""" online="" tenders="" 18.8="" 5.0="" 14.0="" 13="""" software/games="" e-tailer="" 16.9="" 5.0="" 11.0="" 14="" netcall="" callbacks="" 16.3="" 8.0="" 14.0="" 15="""" net="" access="" 17.5="" 6.0="" 14.0="" 16="" netstore="" data="" backup="" 17.5="" 7.0="" 13.0="" 17="""" callbacks="" 16.3="" 7.0="" 13.0="" 18="""" e-tail="" software="" 13.8="" 4.0="" 11.0="" 19="" 365="" corporation="" sports="" portal="" 10.0="" 2.0="" 11.5="" 20="" icollector="" collectables="" 18.8="" 7.0="" 12.2="" 21="" orchestream="" data="" software="" 16.3="" 6.0="" 13.0="" 22="" argo="" interactive="" handheld="" technology="" 18.1="" 7.0="" 13.0="" 23="""" e-marketing="" 15.0="" 7.0="" 14.0="" 24="" internet="" exchange="" net="" cafes="" 15.0="" 6.0="" 15.0="" 25="""" comparison="" shopping="" 16.2="" 4.0="" 15.4="" company="" traffic="" financing="" profile="" 1="""" auctions="" 20.0="" 20.0="" 5.0="" 2="""" fashion="" infomediary="" 17.0="" 12.0="" 2.0="" 3="" sportal="" sports="" portal="" 18.2="" 16.0="" 3.0="" 4="" iii="" personal="" finance="" portal="" 20.0="" 20.0="" 5.0="" 5="" late="" bookings="" 16.5="" 20.0="" 2.0="" 5="" music="" 12.5="" 12.0="" 2.0="" 7="" netbenefit="" e-solutions="" 17.0="" 16.0="" 3.0="" 8="" virtualinternet="" web="" hosting="" 16.0="" 16.0="" 2.5="" 9="" gameplay="" games="" 7.0="" 20.0="" 5.0="" 10="" ncipher="" encryption="" 20.0="" 8.0="" 1.5="" 11="""" gambling="" 18.0="" 14.0="" 2.0="" 12="""" online="" tenders="" 11.0="" 14.0="" 1.0="" 13="""" software/games="" e-tailer="" 20.0="" 8.0="" 2.0="" 14="" netcall="" callbacks="" 10.0="" 12.0="" 2.0="" 15="""" net="" access="" 15.0="" 8.0="" 1.0="" 16="" netstore="" data="" backup="" 12.0="" 8.0="" 3.0="" 17="""" callbacks="" 12.0="" 10.0="" 2.0="" 18="""" e-tail="" software="" 8.0="" 18.0="" 5.0="" 19="" 365="" corporation="" sports="" portal="" 12.2="" 20.0="" 4.0="" 20="" icollector="" collectables="" 5.6="" 14.0="" 1.5="" 21="" orchestream="" data="" software="" 8.7="" 12.0="" 2.0="" 22="" argo="" interactive="" handheld="" technology="" 8.0="" 10.0="" 1.5="" 23="""" e-marketing="" 10.0="" 10.0="" 1.5="" 24="" internet="" exchange="" net="" cafes="" 10.0="" 10.0="" 1.0="" 25="""" comparison="" shopping="" 10.8="" 8.0="" 2.5="" company="" score="" prev="" founders="" 1="""" auctions="" 76.4="" 1="" tim="" jackson="" 2="""" fashion="" infomediary="" 74.3="" 7="" julian="" and="" marc="" worth="" 3="" sportal="" sports="" portal="" 73.1="" 13="" rob="" hersov="" 4="" iii="" personal="" finance="" portal="" 72.9="" -="" sherry="" coutu="" 5="" late="" bookings="" 71.7="" 2="" brent="" hoberman,="" martha="" lane="" fox="" 5="" music="" 71.7="" 3="Ernesto" schmitt,="" bruno="" heese,="" paul="" levett="" 7="" netbenefit="" e-solutions="" 70.0="" 9="" jonathan="" robinson,="" keith="" young,="" larry="" bloch="" 8="" virtualinternet="" web="" hosting="" 69.6="" 17="" jason="" drummond="" 9="" gameplay="" games="" 69.5="" 3="Dylan" wilk="" 10="" ncipher="" encryption="" 67.0="" 21="Alex" van="" someren,="" nicko="" van="" someren="" 11="""" gambling="" 66.1="" 5="" mark="" blandford,="" geoffrey="" wilkensen="" 12="""" online="" tenders="" 63.8="" 14="" rouzbeh="" pirouz,="" alexander="" straub="" 13="""" software/="" games="" e-tailer="" 62.9="" 24="Steve" bennett="" 14="" netcall="" callbacks="" 62.3="" 6="" geoffrey="" rubins,="" john="" burnett,="" david="" rothschild="" 15="""" net="" access="" 61.5="" 23="" bob="" jones,="" john="" sunners,="" andrew="" hurdle,="" keith="" baker="" 16="" netstore="" data="" backup="" 60.5="" 22="" paul="" barry-walsh,="" geoff="" maynard="" 17="""" callbacks="" 60.3="" 16="" eric="" vanderkleij,="" j="" martin="" walker="" 18="""" e-tail="" software="" 59.8="" 8="" michael="" williams,="" caroline="" williams="" 19="" 365="" corporation="" sports="" portal="" 59.7="" -="" danny="" kelly="" 20="" icollector="" collectables="" 59.1="" 10="" james="" corsellis,="" simon="" montford="" 21="" orchestream="" data="" software="" 58.0="" 11="" charles="" muirhead="" 22="" argo="" interactive="" handheld="" technology="" 57.6="" 19="" andrew="" foyle="" 23="""" e-marketing="" 57.5="" 20="" richard="" watney="" 24="" internet="" exchange="" net="" cafes="" 57.0="" 12="" robert="" proctor,="" simon="" henderson="" 25="""" comparison="" shopping="" 56.9="" -="" daniel="" gestetner,="" leo="" gestetner="">

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