MCI changes tack
By : Roseanne Gerin
MCI Management (http://www.mci.com.pl), the only venture capital firm listed on the Warsaw Stock Exchange (WSE), has changed its investment strategy from e-commerce start-ups to specialized IT companies, the firms president said last week.
In the next investment (round), we want to focus on niche IT companies like niche software, systems integration services for the vertical sectors, consulting services and internet infrastructure companies, said Tomasz Czechowicz.
When MCI went public last December, it switched its investment focus from retail e-commerce investments to business-to-business (B2B) e-commerce projects, a sector which many Internet observers predicted would experience huge growth in Poland during the next several years.
We still think this business model has significant risk (regarding) future revenues which cannot appear, and that kind of risk we do not want to take, said Czechowicz.
With its new niche IT investments, MCI has set a two-year break-even point to realize quicker returns. The time frame is much shorter than with B2B e-commerce start-ups and horizontal portals, which can take four to five years to break even, Czechowicz said.
MCI already holds some niche IT companies in its portfolio, including the IT consulting company Process 4E (http://www.process4e.pl) and the computer integrator Computer Communication Systems (CCS) (http://www.ccs.pl).
MCI has about zł. 24 million-zł. 25 million ($6 million-$6.3 million) to finance its planned four to eight investments this year, Czechowicz said. To finance about five projects in 2002, the firm will need zl. 10 million-zl. 15 million ($2.5 million-$3.8 million), which will come from the public offering of shares of some of its holdings, such as the financial vortal Bankier.pl (http://www.bankier.pl), he said. The firm announced last week it was withdrawing a zl. 40 million ($10 million) convertible bond issue it had assumed in March to finance investment projects in 2002.
