The value of e-commerce software group Cognotec has risen from $200 million (€199.44 million) to $285 million (€284.20 million) in the space of three months, following two separate investments in the Dublin-based group by the Japanese Internet company, Softbank.
Last October, Softbank invested $20 million for a 10 per cent stake and followed this yesterday with a further $20 million investment that takes its stake in Cognotec to 17 per cent.
The continued investment by Softbank as well as previous venture capital investment by the American investment bank, Warburg Pincus, has inevitably led to speculation that Cognotec is likely to float on Nasdaq in the next two years.
When Softbank made its first investment in Cognotec, chief executive Mr Brian Maccaba denied that it represented a pre-IPO investment by the Japanese group, but added that he was not ruling out a stock market flotation. Mr Maccaba is the largest single shareholder in Cognotec, with an undisclosed stake that is larger than the 22 per cent held by Warburg Pincus (bought in 1998 for $25 million) and the 17 per cent now held by Softbank. Most of the group's 180 staff also hold shares in the company.
On the latest investment, Mr Maccaba said: "Softbank's new investment is acknowledgement that Cognotec, along with Softbank Group itself, is one of the few international companies at the forefront of the e-commerce revolution. We will continue to draw on Softbank Group's unrivalled expertise in the e-commerce space. This new investment ensures that Cognotec's dominant market position will endure well into the new millennium."
Softbank has become one of the biggest electronic media groups in the world in recent years, largely as a result of its 28 per cent stake in Yahoo!, bought for $100 million but now worth over $8 billion. Softbank also owns a large stake in E*Trade, Morningstar, InsWeb Insurance, E*Loan and OnSale.
Cognotec's main product is its Autodeal LITE software system for foreign exchange markets. More than 30 banks have already decided to used this web-based system as part of their e-commerce trading operations. Softbank and Cognotec are also partners in Forexbank, a joint venture set up last year, which provides a local partner for Japanese and Korean banks that wish to provide their own branded Internet trading service.
