RealTime IT News

Intel, Baring Investing into Czech Portal Site

[May 17] Czech Internet company NetCentrum Ltd. announced minority investment of two venture capital funds: Baring Communications Equity Emerging Europe and Intel Capital. Volume of the investment wasn't disclosed.

NetCentrum Ltd. was established three years ago by two college students, Ondrej Tomer and Oldrich Bajer. Now it is running the portal site Centrum.cz, the newest among Czech portals. It has started in September 1999. Centrum.cz offers highly personalized content. It is aimed not to be mere list of links but source of rich multimedia content and services instead. Currently, Centrum.cz claims to have over 100,000 registered users. "We want to compete in terms of quality and customer loyalty, not necessarily by number of pageviews," said Mr. Oldrich Bajer, co-founder of NetCentrum Ltd.

Since the beginning of May 2000 NetCentrum Ltd runs huge advertisement campaign, the first one of such scale among Czech Internet companies. It comprises both TV commercials and billboards.

NetCentrum Ltd. has been advised during investment talks by PriceWaterhouseCoopers consultancy. Intel Capital, Intel's strategic investment program, is one of the largest worldwide corporate venture programs investing in the technology segment. It focuses on Internet infrastructure, content and services. Baring Communications Equity Emerging Europe is co-sponsored by Baring Private Equity Partners (member of the ING Group) and Communications Equity Associates. It focuses on equity investments into communications, media and Internet in Central and Eastern Europe.

Both funds now hold minority stake in NetCentrum Ltd. Neither the stake nor its value wasn't officially disclosed. However, Czech analysts assume figure of about US$ 4 million. It is very unlikely that NetCentrum Ltd. itself is able to generate significant return on such an investment until expected date of exit, i.e. two years from now. It is assumed that investors are going to aggregate similar portal efforts from various countries of Eastern Europe and than sell them together to a major player like AOL. Investors revealed that NetCentrum Ltd. plans to use at least a part of the investment for its expansion "to the East".