The windfall investment of $244 million that the Internet banking vendor S1 Corp. raised last week is striking not only for its size, but also because of the investors that chipped in.

The three largest of the five separate investments came from insurers - Zurich Financial Services Group, Allianz AG, and State Farm Mutual Automobile Insurance Co. The other two companies involved were banks: J.P. Morgan, which invested through its LabMorgan Internet unit; and FleetBoston Financial Corp., which is the only company in the lot that runs the type of retail banking business befitting a traditional S1 customer.

The magnitude of the investment, which was announced late Thursday, not only solidifies S1's position as the leading provider of Internet banking software, but highlights the designs that nonbank financial institutions have on becoming providers of a full range of electronic financial services.

State Farm, which owns a federal savings bank that offers deposit and consumer loan products, added about $100 million to an initial investment of $10 million in S1, according to S1 officials. Zurich was the next largest investor, then Allianz. With an investment of about $7 million, J.P. Morgan was in distant last place after Fleet. Specific amounts will not be disclosed until S1 files disclosures with the Securities and Exchange Commission.

In a statement, the chairman and chief executive officer of Switzerland-based Zurich Financial, Rolf Huppi, disclosed some of his company's strategy, saying: "We intend to utilize the strengths of S1 to aggressively take our 35 million households online and continue to add value to our customers."

Each investor serves at least 20 million households, representing a healthy potential customer base for S1, which already has about 800 financial institution customers and 2.9 million end-users worldwide.

"It is more than just the money," said Luke Fouke, an analyst at Friedman Billings Ramsey & Co. in Arlington, Va. "It is the significance of the customers' putting more on the table."

The money far exceeds the $30 million to $60 million that Internet banking software companies typically have raised in initial public offerings; in terms of capitalization, it puts S1 firmly ahead of its main rival, Corillian Corp. of Beaverton, Oregon.

The investment also surpasses amounts raised in several rounds of financing that S1 conducted in 1999. In February, Royal Bank of Canada invested $50 million; in May, Intuit Inc. invested $50 million for just under a million shares of S1 stock; Andersen Consulting put up $4 million, and Hewlett-Packard $10 million. In December, Zurich invested $15 million.

Through acquisition, S1 has positioned itself as an Internet banking software provider for all. It acquired Belgium-based FICS, a provider of Internet software for corporate banking, a product that held appeal for J.P. Morgan.

"We look forward to helping S1 continue to build out its corporate and wholesale arsenal," said Chris Ahearn, co-head of corporate development at LabMorgan.

Corporate banking was on FleetBoston's agenda as well. "We are already deploying S1's corporate suite and clearly plan to extend our relationship with S1," said Chad Gifford, FleetBoston's president and chief operating officer.

Atlanta-based S1 was not hurting for funds, but the injection is helping to turn around an increasingly sour attitude among shareholders, which had helped to deflate S1's stock price in recent weeks. Robert Stockwell, the chief financial officer, said the company has a healthy $80 million of cash on its balance sheet and expects to break even in the fourth quarter - excluding one-time, non-operating charges.

But investors have been fixated on S1's first-quarter loss of 35 cents per share, which was higher than the consensus estimate of 23 cents. Revenue was $50.4 million, up 320% from the comparable quarter a year earlier. The net loss was $75.2 million, a figure that included a $35.1 million gain from sales of investment securities.

Analysts said the earnings disappointments were the result of changes that S1 made in the way two of its acquisitions - Edify Corp. and FICS Group - recognize revenue. S1 acquired both companies in the fourth quarter, and S1 essentially made changes that sacrificed short-term profits in favor of longer-term, recurring revenues.

The lowered earnings and subsequent stock drop have prompted at least nine class-action shareholder lawsuits, which company officials said have created unwarranted distractions.

S1's stock fell to a low of $28.3125 last week, down from its Feb. 16, high of $142.25. The stock rose $6.875 Friday to $35.1875.

Michael Hodes, analyst at Goldman Sachs & Co., called the capital raising a "strong endorsement" of S1 that "should go a long way toward quashing any doubts as to S1's leadership in the e-finance infrastructure field."

He added, "The magnitude of the equity commitment in this case approaches the market value of some of S1's major competitors." Corillian has emerged as S1's main U.S. competitor, and the two are involved in a patent dispute.

"In our opinion, this series of strategic investments could mark a key turning point," Mr. Hodes said. "Investor psychology over the last several months has been extremely pessimistic."

Under the terms of the equity agreement, S1 will issue 7.1 million shares of newly minted common stock, subject to adjustments, at an effective price of $34.15 per share.''

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