BusinessMagazin

Tag: Investment

  • A World Without Crisis

    French fund AGF Private Equity, part of the Allianz Group, financed the eRepublik Labs with two million euros, the company behind the eRepublik virtual game developed by Romanian George Lemnaru, through a capital inflow, thus taking over an unspecified minority interest, with the shares issued precisely to make the deal possible.

    The two companies, however, started working together a year ago, when AGF Private Equity made its first investment, 200,000 euros in exchange for 4% in eRepublik. One of the smallest in its entire history, if we take into account the investments owns a portfolio that exceeds 2.5 billion euros, of which 20% directed to 60 IT&C and Internet companies. One might say that the first investment was an experiment, followed up with a ten times higher funding. ”Sometimes we invest in the first stages of the development of a company that has potential, and eRepublik is one of them; this new transaction confirms the bet on the virtual world,” says Guillaume Lautour, member in the companyís board of directors. Also in June 2008, Alexis Bonte, majority shareholder and chief executive of the company invested another 150,000 euros, besides the 200,000 he contributed as start-up capital, thus boosting his stake to 70%. At that moment eight entrepreneurs and business-angel type investors, among which two Romanians who had been living in France for a long time, joined the shareholders of the business. The total investment in eRepublik so far exceeds 2.75 million euros. In figures, last year’s deal, 11% in the company for 550,000 euros, means eRepublik has reached a value of 5 million euros, which makes it the most valuable website in Romania. ”Yet the current financing was based on a higher than initially assigned evaluation,” Bonte says.

    ”I believe the only investments that stand chances over the coming period are particularly those made online,” believes Vlad Stan, founder of SeedMoney, a kind of an investment fund that provides up to 50,000 euro support to new online projects, in exchange for a minority interest. It should be made clear though that a good online business does not mean adjusting a known international project such as YouTube for instance, or in this case the Second Life virtual world, to a small scale, but the exact opposite, developing a local project towards global reach. And the economic crisis is, in Alexis Bonte’s opinion, one of the best moments to invest in a start-up company, which tends to be more stable unlike the foreign capital markets, which are extremely volatile, or the big companies, which are going through a rough time and have to streamline.

    ”The two millions euros received from AGF Private Equity will be used over the next twelve months in order to develop each component of the game in greater detail,” says Alexis Bonte, explaining why so much money was needed for a platform that has expanded with investments of approximately 750,000 euros over the last two years. ”At this moment, the game is only 25% of what it will be as a result of the investments. In five years it could become the World of Warcraft of virtual worlds,” Bonte says. Subsequently, eRepublik will integrate a much more tactical combat system, while for the political component Lemnaru wants to develop a number of personalised administration types for each of the sixty countries in the game so that monarchy and dictatorship could be alternatives to the existing semi-parliamentary democracies.

  • One billion dollars for a new Rompetrol

    Firstly, he is much more open to discussions – this started after the businessman sold 75% of Rompetrol to the Kazakhs at KazMunaiGaz. Secondly, he talks more about macroeconomics than about business, another change that has occurred over the last few years. Thirdly, the business that he is talking about is not just Rompetrol, it includes another four businesses in which he invested, but in which he was not involved at executive level. What has not changed, as far as Dinu Patriciu is concerned, is that he has remained as secretive as ever.

    Out of the four businesses, in which he has so far invested over one billion dollars, he talks openly only about Adevarul Holding (the media company which has now reached 1,000 employees and turnover estimated at 120 million dollars for this year) and about the real estate investments. His main real estate investment has been the acquisition of Fabian. Dinu Patriciu is reluctant to give too many details on the other two businesses, which operate in completely unrelated sectors (energy and technology), but admits they account for the bulk of the billion-dollar investment he has made so far.

    The IT business, whose name Dinu Patriciu declines to reveal, is a telecom equipment producer in Germany, which ”has already started production, boasts hundreds of employees and has a turnover in the range of hundreds of millions of euros.” Patriciu has a partner by his side in the IT business (”I have a partner, I am the financial and majority investor,”) and has applied the same strategy to the energy business, which focuses on the research area: ”In this business, we focus on alternative energy – it is an international research project whose aim is to identify the technological means to make use of sea resources.”