Latin American online network StarMedia Network Inc. today completed
an $80 million private equity placement, bringing the network’s total
capital to $96.1 million.
According to VentureOne Corp., Monday’s announcement is the biggest single
equity transaction conducted by a private new media company.
JP Morgan & Co. and Chase Securities, Inc. are StarMedia’s
financial advisors and placement agents on the convertible preferred
stock transaction.
StarMedia, which earns revenues primarily through advertising and
electronic commerce, said it plans to use the financing proceeds to
significantly grow branding and audience acquisition programs, open more
offices, increase its sales force and accelerate product development.
StarMedia has entered into a number of marketing agreements recently,
including one with Cyberian Outpost
Inc. in early August, and worldwide telecomm carrier Teleglobe in July.
In June, StarMedia signed a two-year, $2 million marketing and distribution
agreement with Netscape Communications
Corp. to offer a free, Latin American Internet
guide, “Netscape Guide by StarMedia,” to appear in Portuguese and Spanish.
And in May, StarMedia announced it tapped Ogilvy & Mather, Miami, to create
a pan-regional prime time television and print advertising
campaign and said it planned to spend over $21 million in 1998 to
further brand awareness.
“StarMedia is the largest, and now, the best-financed Internet company
focused solely on building a global network for Spanish- and
Portuguese-speaking audiences,” said Fernando Espuelas, chairman, CEO,
and co-founder of StarMedia.
“We are very pleased with the strong demand for this latest financing,”
said Jack Chen, president and co-founder of StarMedia. “Interest was
fueled by the rapid growth of the Latin American technology sector,
where, according to IDC, server sales, PC penetration, and growth in
Internet access is projected to outpace any other region in the world
through the year 2000. By that time, according to Saatchi & Saatchi, 34
million Latin Americans will be online.”
