In a transaction that has come to characterize the only encouraging aspect of capital raising in the Philippines dotcom financing the Ayala Group is set to acquire a stake in MeetChina.com, a Chinese business-to-business (B2B) portal.
Through its newly-formed internet investment arm, iAyala, the property and telecom conglomerate invested $6 million, or about 20% of the proposed $30million financing for the B2B portal that provides an online trading platform for sourcing products from China.
"The MeetChina.com business model connects suppliers in emerging markets to small to medium buyers in more developed markets and facilitates transactions between the two parties, says Jack Madrid, an executive director of iAyala. We see a tremendous opportunity for bringing the same kind of discovery-to-settlement online service to the Philippines."
Using its subsidiary Ayala Internet Venture Partners, iAyala entered into a memorandum of understanding with MeetChina.com to integrate the latters business model by studying the formation of MeetPhilippines.com, an e-commerce trading platform designed to connect Western buyers directly with manufacturers in the Philippines. The MOU was signed on July 25 in San Francisco during President Estrada's visit to the US.
Renato Marzan, managing director of Ayala Corporation said: The group of investors [who participated in this round of financing] is largely composed of partners that plan to integrate MeetChina.com as part of their global e-commerce strategies."
"With partners such as Mitsubishi and the Ayala group, we expect intra-Asian trade through MeetChina.com to grow rapidly," says MeetChina.com CEO Len Cordiner. "Trade within each region is a complicated process and in order to facilitate transactions, in-country expertise and reach is required."
The other investors joining this round of financing for MeetChina.com had already participated in the trade portal's previous financing activities. These included Stanley Works, Mitsubishi Finance, Total Film Group, Hikari Tsushin, Vickers Investment, Bessemer Investments, Archipelago Group and Crystal Ventures.
The funds to be raised during this time round will be used to develop a suite of online negotiation and settlement tools to ensure a safe environment for sourcing goods from China and other emerging markets.
Except for the merger activity in the banking sector, the Philippine capital markets have been quiet. The only glimmer of activity is in dotcom financing. Even then, the drowsy stock market has dampened capital raising activities. The IPO of DFNN, a web-enabler for the financial sector, originally scheduled for July, has been postponed to September.
MeetChina.com started as a web-hosting service for manufacturers in China and became a trading platform in late 1998. In 1999, the portal was launched with the support of the Chinese government and trading power China Resources.