LONDON – zouk Holdings, a specialist e-business venture firm formed last year, has linked with strategic partners Deutsche Post and AMP Private Capital.
zouk’s founders, former investment bankers Samer Salty, Felix von Schubert and Nejat Alemdar, will each take a 10% stake in the company.
AMP is also the cornerstone investor in the zouk European e-Commerce fund, which to date has raised $90 million. Dresdner Kleinwort Benson has also made a major commitment to the vehicle.
The potential benefits of the zouk/Deutsche Post relationship are clear. E-commerce, whether business-to-business or business-to-consumer, must address complex logistical issues to deliver their goods.
“Negotiating your way around the maze of currencies, cultures and languages is a daunting task for any organization, let alone an Internet start-up,” Salty said, adding that by leveraging Deutsche Post’s logistical expertise, places zouk in a stronger position for its investees. Deutsche Post, meanwhile, expects to line up lucrative new contracts for the comprehensive e-commerce logistics and distribution services developed in recent years, while also benefiting from access to developments in this rapidly growing sector of the European economy.
Meanwhile, through its investment in zouk Holdings and commitment to the fund, AMP gains a strategic presence in the European e-commerce market. Douglas Hogg of AMP said, “zouk has been able to react at Internet speed to developments in the market.” AMP is impressed by the zouk team’s expertise, knowledge and track record, and also feels the team has “the right blend of personal qualities to work well with entrepreneurs running e-commerce companies,” he added.
The majority of zouk’s multi-national team was drawn from investment banks, and their range of expertise covers technology economics, engineering and finance. Salty said the zouk team’s varied backgrounds will prove a competitive advantage.
“In Europe, local content of sites is very important,” he said. “The diverse European market is one we understand well and therefore our experience gives us an advantage over United States venture capital funds seeking opportunities in Europe.”
The zouk fund typically will invest $2 million to $7 million for minority positions and expects to build a portfolio of 15 to 25 investments. The group has backed six companies to date, nearly all of which are the new economy equivalent of “household names.” This portfolio includes four business-to-business models – Mondus.com, Skillvest.com, Fashionfile.com and Clicksure.com – and two e-retail’ ventures – Zooplus.de and Boo.com.
Unfortunately, zouk could be forgiven for wishing that Boo.com were slightly less of a household name. The online fashion sportswear retailer, which first hit the headlines early last year while just a concept, raised record sums for a European start-up but has an uncertain start. Valued at more than $200 million by the time it raised a third round of funding last August, Boo.com’s Web site was launched in November, some five months later than planned. Boo.com has been subsequently plagued by technological problems and negative publicity. Reports of substantial staff layoffs in January to reduce over-capacity were followed by the news in February that one of Boo’s three founders, Patrik Hedelin, was relinquishing his executive role to “spend more time with his family.” New economy or not, some things never change.-J.J.