Tech sector veterans Domenic Carosa, Danny Wallis and Tony Stephen will raise more than $3 million for acquisitions through their Future Capital Development Fund, before a planned listing on the Australian Securities Exchange later this year.
Carosa, the co-founder of digital and media company Destra, told SmartCompany from the US this morning that he has already raised more than $2 million in the capital raising from existing investors, who include online classifieds guru Simon Baker and Flexigroup founder and rich list member, Andrew Abercrombie.
As the capital raising was only intended to raise $2 million, Carosa can now take some oversubscriptions from what he has described as “strategic investors”.
“I’ll end up raising just over $3 million, just because there is so much demand.”
Carosa then plans to list the fund on the ASX in late 2010 or earlier, in a float that he expects will raise $10-20 million.
The fund is purely focused on internet companies and has so acquired stakes in three businesses: three-year-old gift registry services business Our Wishing Well, domain name portfolio business Domain Folio 1 and premium SMS and MMS provider SMSC provides premium SMS and MMS aggregation services.
Carosa says he plans to make at least three more acquisitions prior to an ASX float and says he has about half a dozen companies currently under review.
“There are some really good, solid internet companies out there. Valuations for private companies are still quite low which gives us a really good opportunity.”
The Future Capital Fund is what is known as a pooled development fund, which has several tax advantages, including no capital gains tax and low tax rates for income.
Carosa and Wallis, who is the founder of listed software company DWS, took the fund private last year. It was previously listed on the Australian Pacific Exchange.
The information memorandum for the fund shows it has $2.1 million in cash and has made $610,000 in investments thus far.
Carosa believes the fact that the fund can provide access to a number of different internet businesses will be attractive to ASX investors.
He also believes investor appetite has finally returned after a quiet 2009.
“Investors were shy in 2009 but the fact that I’ve managed to raise the money and I am oversubscribed is testament to the fact that it’s a good offer and the market is back.”
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
