Asia Online Gets $100 Million Investment

Asia Online Ltd, a regional Internet solutions and access provider, has raised US$100 million from a pedigree of institutional and strategic investors.

The $100 million figure is the largest largest known single-round venture funding of a private Internet play in Asia to date. The last three rounds of investment in the Hong Kong-based company brought in more than $140 million in capital

Led by Paribas Affaires Industrielles (PAI), investors in this round include ABN Amro Capital Investment Asia Ltd, Dell Computer,
CIBC, Hikari Tsushin, MF Private Capital, Paine Webber, and Systex Capital
Group Inc.

The new investors join existing shareholders Concentric Network Corp., GE Equity Asia-Pacific, Interliant Inc, JP Morgan International Capital Corp, Nexus Group, Peqount Capital Management Inc and Softbank Technology Ventures

Asia Online plans to use the additional funds for further expansion in the region, to make acquisitions, to develop technology and to integrate product offerings of partners.

Through expansion and acquisition, Asia Online has ISP operations in Hong Kong, the Philippines, Malaysia, Australia, New Zealand, India and the North America.

According to Kevin Randolph, president and chief
executive of Asia Online Ltd, the company is also working on expansion into Taiwan, Korea, and China – including Shanghai, Shenzen and Beijing.

Originally, Asia Online was primarily in the access business – with some stints in content generation. Now, the company is setting its sights on the growing application service provider market in Asia.

It is offering co-location services, web development, online application services, unified messaging, virtual private networks, systems and network integration, and even translations services for multinationals who want to expand and localize in Asia.

Randolph told that Asia Online will provide full solutions to its corporate customers, even down to the hardware. He indicated that solutions provider would be bringing the products of some its strategic investors into the Asian market.

Already, the face of Asia Online has changed in its traditional markets. In Hong Kong and the Philippines, the company’s business has in one year gone from 85 percent dependence on the access services market to 53 percent dependence, says Randolph. Asia Online’s corporate business has also increased by 151 percent in 12 months time.

In areas that Asia Online wants to expand, particularly Korea, Singapore, Taiwan and Japan, the company is looking at acquiring system integrators, Web hosting firms and Web developers.

In China, Asia Online wants to make acquisitions but it is hoping to get majority stakes which currently is not permitted for ISPs in China. “We are open to minority stakes but we would prefer to make strategic investments,” said Randolph.

Asia Online also announced that it was setting up a multimedia university in the Philippines to train its future employees. “Part of the problem in the service industry is finding people who can provide the service,” said Randolph. “We’re building a University – a multi-media University – partnered with the University of the Asia Pacific.”

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