[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”.
