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Consultancy plans to rival Accenture in its global reach
Catenas, a Web consultancy network, has raised $54.7m (E59.2m) in financing, led by founding investor 2M Invest with $10m. Other unnamed Danish, Asian and US investors also participated in a round which valued Catenas at $188m.
The firm is seeking to rival the likes of Accenture in its global reach, including developing economies. Niels Christian Nielsen, CEO of Catenas, said: 'It's not essential for what our revenues will be, but we think it is essential we can operate in emerging markets.'
He added that addressing the 'digital divide' is a matter of 'enlightened self-interest'. More firms are likely to join Catenas in the near future, such as Value Partner in Italy. Catenas is also talking to possible technology partners in Scandinavia, India and the US.
The firm is headquartered in San Francisco, with London as the European base. With the financing, Catenas has spent $38.1m on stakes in nine companies covering strategy, branding, business intelligence and technology implementation. The investments were made up of $32m in cash and 20% of Catenas's equity.
The portfolio consists of branding agencies Addis (10%) and Prophet (25%); consultancy firms The McKenna Group (25%) and OC&C Strategy Consultants (25%); Web systems builders Euphorion (50%); marketing firm New Canoe (50%); Linux developer LinuxTimes (40%); business intelligence firm Eucid (81%); and Web agency Metrocomia (100%).
'The 10% one is an abnormality…uncomfortably low. My ideal ownership is 50% outright,' said Nielsen. That being the case, he felt the stakes in Metrocomia and Eucid are likely to fall over time, with possible co-investors in Metrocomia including the investment arm of the World Bank and 'other people who want to make a statement about the digital divide'.
Catenas was established last year by its management and 2M Invest bringing 2M Invest's total investment in Catenas to $10.5m. In addition, Catenas has raised a bank loan of $16.6m, guaranteed by 2M Invest.
The Danish VC's shareholding fell from 88% to 53% and Nielsen, himself a board member of 2M Invest, said that: 'My thinking is they will not remain a majority holder.' Catenas might seek another round of funding in the second half of the year, although 'we could operate without using the next round,' said Nielsen.
Annualised consolidated turnover for the group is $108m, with operating profits of $14.9m (based on figures at the end of Q3, 2000). Catenas is expecting an operating profit of $21.1m on turnover of $154.3m for the current year. Across the group there are 497 staff, 430 of them billable.