The Future Capital Development Fund (FCDF) has raised $5 million to invest in the development of emerging companies and an existin portfolio of nine internet and technology companies made over the past 18 months.
“We completed the $5 million raising in just over a week,” said FCDF executive chairman Domenic Carosa, who was in the US this past week.
Mr Carosa was in New York talking with investment advisers about a possible dual listing of the fund next year aimed at raising $20 million to $30 million. He is looking for partners in San Francisco to launch the fund’s online investments in the US, as well as opportunities to take established US online businesses to Australia under licence.
Among FCDF’s portfolio is OurWishingWell.com, which derives 80 per cent of its revenue from offshore, mostly in the US. Mr Carosa is also seeking to hire sales staff to expand the business of MyGuestList in the US. FCDF invests in young, fast-growing internet, mobile and technology companies that have customers and transactional revenue.
This March, the fund invested an undisclosed amount in PaintMyPicture.com, an online service where consumers visiting a site supply a photo and PMP’s global team of artists hand paint it in oil on canvas.
This was the third investment in internet companies in the past six months, the others being Imorial.com, a memorial site for people and pets, and Eventarc.com, an online booking system for events and ticketing.
Other businesses in the FCDF portfolio included CheapHotels.com.au, SMS Central, Domain Folio No. 1 and Drive My Car Rentals.
Usually the fund invests between $100,000 and $500,000, takes a significant minority stake and works with founders and senior management to expand the business.
“Our pipeline of new investments is looking very positive. Also there is no shortage of new “upstarts” popping up all the time,” Mr Carosa said.
Following the successful capital raising, Andrew Fiori-Dea, who joined Future Capital as commercial director in July 2010 and was previously general manager at MYOB Australia, was appointed chief executive. Mr Fiori-Dea was directly involved in six of the fund’s nine investments in the 2010 financial year.
The company is also assembling an advisory board to provide services to founders and executives of the companies the fund invests in. The latest appointment is former CEO of realestate.com.au, Simon Baker.
Launched in January 2009, the fund raised $2.5 million last year. Shareholders in the latest raising will represent 42.6 per cent of the fund.
Investors tend to be wealthy individuals, internet and public company entrepreneurs. They have included Danny Wallis, co-founder of Future Capital, Mr Baker, and Guy King and Bevan Clark, who sold their website, retailmenot.com, to WhaleShark Media.
Source: Australian Financial Review 12 Jul 2011 PRINT EDITION: 12 July 2011 by Mark Fenton-Jones