RealTime IT News

Magex Raises $80 Million for International Expansion

Digital commerce services company Magex announced Monday that it has raised $80 million, calling the financing round one of the largest amounts ever raised in private equity funding by a European online venture.

Magex said it will use the funds to introduce its services to unspecified global markets during the coming summer. The Magex service enables digital content providers to collect payment when they deliver music, video and other content over the Internet.

Peter Beverley, chief executive officer, Magex, said the funding would allow the company to respond to increasing demand and new opportunities, especially in the United States.

Led by Goldman Sachs -- and the $1.85 billion global private equity fund Capital Z Financial Services Fund II, LP -- the investment comes from many sources, including Universal Music Group, InterTrust, Reuters, GE Capital, and Europ@web, among others.

Speaking for Capital Z, Principal Frédéric Stolar said he thought no other company was poised to take a bigger slice of the digital content market than Magex.

"The company already has first-mover advantage with a live digital commerce service which meets the needs of consumers and content providers," noted Stolar.

In the past six months, Magex has doubled its team to 85 people, establishing offices in both New York and London. It will shortly open West coast operations and expects to expand significantly its operations in North America.

Magex offers a copyright protection feature which it claims will enable content providers to place valuable content safely on the Internet. Without effective protection, publishers could face huge losses -- a fact demonstrated by hackers recently when a Stephen King novel published in the eBook format was placed online as freely accessible text.

Whether hackers break the Magex codes remains to be seen.

Magex also offer payment options including one-off access, pay-as-you-play, and outright purchase. Its financial clearing facility routes payment to each company, handling payments as small as a few cents.

The market for payment infrastructure services is expected to be worth around $27 billion out of the total $275 billion digital content market by 2003, Magex said in a statement.