There seems to be more companies forming with intent to make it big in incubators. JDX seems short with the capital however the capital they do have appears well placed.
Tuesday January 18, 7:58 pm Eastern Time
Canadians launch big fund for Internet start-ups
By Lydia Zajc
TORONTO, Jan 18 (Reuters) - Internet start-up firms in need of a cash fix can now turn to
Canada's largest venture capital fund for Web concerns.
The fund, called XDL Intervest Capital Corp. and launched on Tuesday, holds more than
C$130 million thanks to the efforts of a triumvirate of Canadian entrepreneurs.
The three fund-raisers are: Dennis Bennie, who co-founded fax software maker Delrina Corp. (Toronto:DE.TO - news),
Michael Bregman, now chairman of coffee house chain Second Cup Ltd. (Toronto:SKL.TO - news) and Tony van Marken,
former chief executive of telecommunications software developer Architel Systems Corp. (Toronto:ASY.TO - news)
``By investing the monies we're going to build some great companies,' Bennie told Reuters on Tuesday, adding that XDL
would blaze the trail for others to follow. ``That's going to be a role model for any other venture capital fund in this
environment.'
The idea sprang from Bennie's development in 1997 of a similar fund, also called XDL, to provide monetary liquidity to Internet
and electronic commerce concerns. The original, C$25-million fund is now fully invested and has put its money into companies
such as Toronto-based Delano Technology Corp. Delano said on January 12 it filed for a public stock offering on the
technology-heavy Nasdaq stock market.
The new XDL is backed by CIBC World Markets, which is a unit of Canadian Imperial Bank of Commerce (Toronto:CM.TO
- news) and will act as lead investor.
The entrepreneurs expect to take up to three years to invest all the cash. They forecast annualized returns exceeding 40 percent
on the overall fund, expecting to receive at least 10 times its initial investment in some cases.
Bregman said they plan to focus on firms that facilitate electronic commerce between companies, the so-called
business-to-business market, and have received at least four to five ideas a day over the past month. ``There's some really
good people around,' Bregman said.
The new XDL has already invested in Hip Interactive Corp., a marketer and distributor of computer and video games which
trades on Canada's over-the-counter market.
Hip Interactive received a C$3-million injection but the fund might give out C$10 million or more, the managers said.
Their pool of clients will be mostly home-grown but they've also considered opportunities in Britain and the United States, they
said.
Analyst Jordan Worth at International Data Corp. Canada believes that the fund will have more problems finding strong plans
than doling out its cash. ``It's certainly a fine boost for the Canadian e-commerce industry,' Worth said. ``There's probably a
fair bit of money out there, but 'way more bad ideas that would never get funded than good ideas.'
($1=$1.45 Canadian)
rob... |
