LONDON – Rupert Murdoch, who was initially unphased by the Internet and e-commerce, has now become an enthusiastic convert, launching News Corp’s $400 million e-partners fund for e-commerce and new media ventures. The vehicle will be managed along with ePartners, a United Kingdom Internet-focused joint venture between e-partners and Softbank Corp. of Japan.
Murdoch’s plans suffered a brief setback a few months ago when Stephen Grabiner, the former chief executive of OnDigital reportedly turned down the post of ePartners’ CEO to join Apax Partners.
Ironically, ePartners has now appointed a CEO for e-Partners from the private equity sector. Diana Noble, formerly a partner at Schroder Ventures, left the private equity house last year to study at Harvard University – an ideal environment for contracting the e-bug.
eVenture’s brief is simple: to provide the necessary incubation services to transfer existing Softbank-backed Internet businesses from the U.S. into other English speaking markets, including India, Australia and New Zealand, as well as the U.K. Or perhaps, not so simple, in that the whole rationale for the project rests on the ability of the transferred enterprises to secure first-mover’ advantage in their new markets. Given the current breathtaking pace of change in the Internet sectors – and the fact that virtually the entire investment community seems to have contracted Internetitis since this time last year – Noble and eVentures will have to hit the ground running.
Noble is clearly excited by the challenge and speaks of “the fantastic” functional and Internet start-up expertise that exists within eVentures. Softbank has enjoyed spectacular success backing software and Internet-related companies in the U.S. and Japan – previous investments include Cybercash, E*Trade, Freeloader, Geocities, Intervista, USWeb and Yahoo!
Noble explained that U.S. parent companies will be able to choose whether to be actively involved in transferring their business models to new markets, adding that the perceived opportunities in Internet-related sectors are now so great that young companies can attract “best of breed” managers from virtually every industry. Because the incubated companies will enjoy the benefits of their U.S. models’ learning curves without incurring the same level of risk, Noble said the potential exists for eVentures’ portfolio companies to establish themselves extremely quickly.
Whether or not the sky is the limit, eVentures has set no formal ceiling on the capital available to invest in each portfolio company.
Discussing the attraction to her new role, Noble said one appeal is that it combines familiar venture capital discipline with what is effectively terra incognita in commercial terms. The risks are great, but so are the potential rewards. “Perhaps the most exciting thing is that activity in the e-commerce sector is helping to narrow the gap between the U.S. and U.K. markets – U.K. consumers have had to put up with expensive distribution structures for far too long,” Noble said
Softbank, meanwhile, is engaged in a parallel joint venture, @VISO SAS, with French conglomerate Vivendi, to facilitate the rapid entry of U.S. companies into continental European markets.