University Spin-off Seeks Venture Capital
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Wisers Information Ltd., a technology based startup founded by the Chinese University of Hong Kong in July 1998, is actively looking for capital injection.
"We definitely need venture capital," said Ringo Lam, the chief executive officer of Wisers. "Although the University paid for the development costs of the technologies, we only got HK$1 million to start the company."
"It is definitely not enough for the company to expand," continued Lam, "so we are already looking for venture capitalists to come into the company. The University supports this."
Since its inception, Wisers has developed two products that rely on Chinese information processing technologies, Newsy.net, a Web-based news service for individual users, and WiseNews, a Net-based professional news clipping service provided to companies, government bodies, schools, and libraries.
WiseNews has fifty trial customers and has gained 10 new corporate and organizational customers since it was launched in early December. Among these customers are the Legislative Council, the Hong Kong Productivity Council, several local banks, and the libraries of most Hong Kong universities.
"From the traditional news clipping services, we will gain more than half the market in two years," Lam predicted for WiseNews.
Although the university is still the principal shareholder of WiseNews, Lam stated that the startup became self-sufficient when it was launched.
"We have to pay rent for the equipment and for the space at the university," said Lam. The Wiser's staff also has the remaining equity in the company.
According to Lam, the most difficult obstacle in developing the two online services was negotiating with the local content providers in Hong Kong.
Wisers depends on content from the local newspapers and magazines, who get about 30 percent of the revenue, to supply the news services.
The company collects the desktop publishing files of content providers electronically and processes the files through an interface that extracts text and pictures for online publication.
Although 70 percent of newspapers in Hong Kong have signed up to WiseNews on a trial basis, Lam indicated that there were some initial pitfalls in convincing local news organizations that an online news clipping service was a worthy endeavor.
"They don't believe that they are in the information business," said Lam. "They think they are just printing paper. It's difficult to persuade them that they can also sell news."
"[News] staff treat the whole computer system as a big typewriter," said Lam, "They actually delete files everyday."