Another Irish entrepreneur's fortunes were significantly boosted this week following the investment of $20 million (€19.98 million) in his company by a Japanese firm.
Mr Brian Maccaba's stake in Cognotec - the company he founded - has not been disclosed but is understood to range somewhere between 25 per cent and 45 per cent. That values his holding between $71 million and $128 million.
There is now a strong likelihood that the company, which specialises in foreign exchange software for online transactions, will consider a stock market listing before the end of the year.
In one fell swoop the private company founded by Dun Laoghaire-born, Mr Maccaba, increased its value this week from $200 to $285 million, after influential Japanese Internet company Softbank invested another $20 million to bring its initial 10 per cent holding in the company up to 17 per cent.
US investment bank, Warburg Pincus, took a 22 per cent stake in Cognotec following a $25 million investment in 1998. The rest of the company is shared between 12 senior managers and its 160 staff. Softbank's interest in Cognotec is significant because of the Japanese company's remarkable Internet investment pedigree. It bought 28 per cent of Internet giant, Yahoo!, in the early days for $100 million. This stake is now worth nearly $8 billion. It also holds sizeable stakes in Internet front runners, E*Trade, InsWeb Insurance, E*Loan and OnSale.
Mr Maccaba told The Irish Times yesterday that Softbank approached Cognotec to raise its stake, and while the additional investment was welcome, it was not necessary. Softbank's second in command now takes a non-executive position on the Cognotec board, and according to Mr Maccaba his industry expertise will prove invaluable.
The latest investment also means Cognotec is under less pressure to raise capital publicly, although Mr Maccaba said this would not be the company's primary motivation for going public.
"We wouldn't be motivated financially to take a listing, but it does a lot for the company's visibility when selling to banks. We're not ruling a listing out as something that could happen in the course of the year."
Mr Maccaba said a public listing on the Nasdaq exchange in the US would have been the preferred route for Cognotec a year ago but he believed now that the European markets had woken up, with London becoming much more receptive to technology stocks. A dual listing between London and the Nasdaq would be a serious consideration. Cognotec, after a shaky early start 12 years ago, recorded strong profits until a year ago, when it decided to shift its foreign exchange banking software focus to the Internet.
