LONDON/PARIS – Softbank Corp., Japan’s leading Internet investor, and Rupert Murdoch’s News Corp. are weaving a tangled worldwide web of cross shareholdings as they step up their Internet investments across Europe.
News Corp. is creating a $650 million venture fund for Internet companies outside the United States that will provide $250 million of epartners II’s capital alongside $200 million from Softbank. The balance will be drawn from other sources, including Jacob Rothschild. In turn, epartners II will commit $150 million to Softbank UK Ventures, which will focus on Internet and wireless deals in the U.K. – and will be managed by ePartners, which is headed by chief executive Mark Booth.
An additional $250 million from the epartners fund will be channeled into eVentures, the 50/50 joint venture between News Corp. and Softbank, which is propagating U.S. Internet companies in other English-speaking markets.
As a result, epartners II will have $250 million at its disposal to take direct minority holdings in Internet-related companies – enough to last until about October, judging by current burn rates.
Murdoch Overcomes Internet Doubts
Its predecessor fund was set up last summer with $350 million and has made 10 investments to date, including Buy.com Inc. and Eyestorm.com. Despite portrayals of Murdoch as a Net skeptic during the first flush of market e-mania, News Corp. has increased its Internet venture exposure to some $1 billion in less that two years.
Softbank Launches Two Euro Funds
Softbank, meanwhile, is moving ever more aggressively into the European Internet market on its own account with two funds totaling $1 billion. The $450 million Softbank UK Ventures fund will draw $250 million directly from Softbank alongside the $150 million from epartners II.
Softbank’s new $550 million continental vehicle, Softbank Europe Ventures, will be backed to the tune of $100 million by Vivendi, Softbank’s existing joint venture partner in @viso, a continental counterpoint to eVentures. Softbank’s commitment to Europe Ventures is $400 million, leaving just $50 million to be raised from third-party investors. Both of the new Softbank funds will look to exploit developments in wireless applications, a field in which Europe currently leads the U.S. and Japan. Eric Hippeau, head of Softbank International Ventures, will initially lead the management team for Softbank Europe Ventures pending the recruitment of a dedicated manager.
Softbank, which has already plowed an estimated $3 billion plus into more than 300 Internet-related companies – mainly in Japan and the U.S. – in March announced plans to invest as much as $5 billion more worldwide (including the $1 billion of European funds) over the next year and a half.