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Brazil's Money Men.

Meet the financial gurus who are pouring millions into Internet companies in Latin America's largest market.

* OCTAVIO PEREIRA LOPES

28 years old

Director of Internet investments for GP Investimentos

Lopes, who heads Brazil's largest local private equity firm, is the financial wizard who will decide where to spend an estimated US$100 million this year in web investments.

An economist with an MBA from Wharton School at University of Pennsylvania, Lopes is a former investment banker at the S[bar{a}]o Paulo branch of ING Barings. In 1997, he moved to GP Investimentos and immediately joined the executive board of two fledgling GP-owned websites: an e-commerce site called Shoptime and an Internet provider called Mandic.

Since then, he has been busy purchasing or starting websites ranging from e-commerce and business-to-business to online auction sites and a portal for buying new or used cars. "GP's strategy is to buy Internet firms where there were previously no major competitors and become the dominant player in that area," Lopes explains.

GP's major Net investment occurred last July after it bought a little-known online bookselling site called Booknet, which was quickly renamed Submarino.com. Lopes then brought in several big-name partners from New York, such as E.M. Warburg, Pincus & CO., Kohlberg Kravis Roberts & Co. and Chase Capital Partners, to raise the largest amount of private capital ever for a Latin American e-commerce company.

Armed with $85 million, Submarino.com is on its way to becoming the Amazon.com of Latin America, selling not only books but music videos and toys. By selling not only in Brazil but also in Spain, Mexico and Argentina, Lopes hopes the site will become the largest online shopping destination in the Spanish- and Portuguese speaking world. On tap are the United States and Portugal.

Moreover GP, with Lopes at the helm, has financed nine other Internet ventures, including:

* Elefante.com.br--GP and Warburg, Pincus own a combined 25% share in this Sao Paulo-based agendaplanning site, and GP, through Submarino.com, owns another 10% stake.

* Lokau.com.br--GP holds a 28% stake in this start-up venture to develop a Latin American version of auction site e-bay.

* Webmotors.com.br-- GP has a 30% share in this portal, which allows users to purchase new cars online.

* Internet Gratuita (iG)--GP and Rio-based investment bank Banco Opportunity invested $120 million to create Brazil's first free Internet access provider. In its first five weeks, iG signed up an amazing 750,000 subscribers. Now, GP and Opportunity plan to raise $120 million to expand the company.

* Mercado Eletronica-- GP and Rio-based investment bank Banco Opportunity own a combined 46% stake in this Sao Paulo-based business-to-business (B2B) marketplace for medium-sized and large companies."B2B firms will be a major focus for our Internet investments this year," predicts Lopes.

* CLAUDIO CORACINI

43 years old

Investment Director for Unibanco Private Equity

Coracini is a former investment banker who heads the private equity arm of Unibanco, Brazil's third-largest private bank.

Last September, he engineered the bank's first Internet investment, with Unibanco Private Equity paying US$15 million for a 10% stake in Zip.net, Brazil's third-largest portal. Unibanco soon chipped in another $3.5 million so it could offer its clients free e-mail services.

However, the venture ended last February after PT Multimedia--Portugal Telecom's cable TV/Internet unit and Portugal's largest Internet provider--bought 100% of Zip.net for $365 million to eventually combine the web portal with its cellular phone business. As a result, Unibanco's private equity fund became the first in Brazil to divest its Net shares and earn a whopping profit. For its five-month investment, Unibanco received $42 million, or a 127% return.

Since then, Coracini's investment budget has risen to about $50 million and dot-com geeks are flooding him with ideas. "Each day, I receive another Internet proposal," he says.

Most recently, he purchased a 15% stake in Superbid.com.br--a business-to-consumer (B2C) auction site that sells new products to the highest bidder.

But Coracini believes the future is in business-to-business ventures, which he describes as a "little-developed area in Brazil." He adds, "Our aim is to target companies where the bank has a financial advantage, as in the case with Superbid, or where our customers can benefit, as with Zip.net."

* PEDRO MELLO

30 years old

Director InternetCo Investments

Mello is the young director of a private equity firm that specializes in Internet start-ups, yet he is not your typical stodgy investment banker.

At 15, he went to work for an accounting firm so he could buy a motorcycle. There, he taught himself how to run the company's computerized invoicing operation. Later that year, the enterprising teen-ager began his own business reselling computers and software to small firms. He got his motorcycle.

At 25, he created another company called "Plug Use," a S[bar{a}]o Paulo computer-software retail chain. Five years later, the entrepreneurial nomad pooled US$6 million with three partners and created InternetCo.

The partners immediately paid $250,000 for a 50% stake in OneClick, a S[bar{a}]o Paulo start-up that develops electronic commerce websites for and medium-sized companies. More specifically, its software creates standardized virtual stores, and programs to undercut the expensive set-up fees of large Internet service providers.

OneClick has since captured a 30% share of Brazil's market for developing e-commerce websites and has received an infusion of capital from the Exxel Group, Argentina's largest private equity outfit.The Buenos Aires company paid between $5 million and $10 million for a 20% stake that should help OneClick expand its operations into Argentina, Mexico, Chile and Venezuela later this year.

lnternetCo also purchased a 50% stake in Via Otica, a developer of sophisticated business-related websites and CD-Roms. InternetCo also co-founded BoardCo, an unusual site that offers executives advice from a virtual board of directors. Subscribers select board members from a list of provided executives and then pay them to take part in a virtual board meeting conducted by e-mail. The client sends each board member a topic and then exchanges ideas--all bye-mail.

"Our strategy is to invest $15 million this year in firms where we can quickly dominate the market via low prices, as with OneClick," Mello says, "or become the first firm in the market, as with BoardCo. This greatly reduces the competition."

* CHRISTOPHER MEYN

31 years old

CEO, LatinTech Capital

Meyn, an Oregon native, is a Latin American veteran. He started his career at 20 years old as an investment consultant for Dean Witter (now Morgan Stanley Dean Witter) and stayed there until he was 24.

For the past three years, he has worked for LatinTech Capital, a technology investment fund for Latinvest Asset Management. The Rio-based subsidiary of Globalvest Management made the heftiest investments last year--US$4O million--in Brazilian Internet companies. And Latinvest plans to more than double those investments this year to $100 million.

"I see Brazil as a sizeable growth area for cable television, telecommunications and the Internet," says Meyn.

Last year, LatinTech took part in a $100 million private placement for Universo Online (UOL), Brazil's largest Internet service provider. The fund then invested in El Sitio, a Buenos Aires-based portal going head to head for market share with New York-based, pan-regional portal StarMedia Networks.

Since then, under Meyn's guidance, LatinTech has invested in several ventures, including:

* A 21.2% stake in MLab, a Rio-based website developer;

* A 15% stake in the Curitiba-based Conectiva, a leading distributor of Linux, a low-cost alternative operating system to Microsoft's Windows;

* A 10% stake in Modulo Security Solutions, a Rio-based company that provides Internet security solutions;

* A 30% stake in MHW Inform[acute{a}]tica, a Rio company that develops web-based training software. Companies use the programs to conduct training courses and provide educational services via the Internet;

* A 16% stake in Vesta Technologies, a S[bar{a}}o Paulo developer of e-commerce solutions.

Currently, Meyn is looking for business-to-business (828) investments. "The B2B market will generate 10 to 20 times greater revenues than business-to-consumer e-commerce," he predicts.

ROBERTO VINHAES, 37, Director, Investidor Professional

Last January, Vinhaes helped launch Brazil's first listed Internet fund from his perch as director of a US$450 million asset management firm called Investidor Professional. Vinhaes, an engineer who has also tried cacao farming in the northern state of Bahia, co-founder investidor after making a killing in the stock market by the age of 26.

The asset management firm began as a typical company offering financial consulting to wealthy individuals. But when vinhaes became interested in the Internet and Brazilian government privatized the telecommunications industry, he changed the company's direction. "I saw the Internet as a strong tool linked to a weak telecommunications infrastructure," he says.

Vinhaes then launched an initial public offering of $27 million worth of shares in what he dubbed, IP.com, a venture capital fund created to make early stage investments in Internet companies, the first fund of its kind in Brazil. "IP.com gives investors a public instrument with some liquidity and allow us to raise money to build an online conglomerate," Vinhaes expalins.

The fund has since used $22 million of its funds to purchase InVent, a Rio-based "incubator," which provides start-ups with office space, hardware and other infrastructure. InVent recently bough control of Ole.com.br, a soccer entertainment site that lets surfers simulate the buying and selling of soccer players and teams. It hopes to purchase about a 12 companies this year in areas that are not teeming with competitors. Instead of Internet service providers, portals and auctgion sites, Vinhaes says he will concentrate on vertical portals, education sites, reverse auctions and business-to-business websites.
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Author:KEPP, MICHAEL
Publication:Latin Trade
Geographic Code:3BRAZ
Date:Jun 1, 2000
Words:1602
Previous Article:WHAT IS THE MEANING OF INTERNET LIFE?
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