Citigroup, Merrill Lynch and other groups invest $12 million in Latin American Internet auctioneer DeRemate.com to fund the start-up's quest to become the region's answer to eBay.
The banks and three other investment groups agreed this week to provide the capital, which will be used to market DeRemate and expand its technological capabilities, said DeRemate chief executive Alec Oxenford. The company is also planning an initial stock sale in the U.S. in the second half of 2000.
DeRemate, scarcely months old, is in a mad dash to corner the Latin American market for Internet sales of cars, computers and other goods ahead of a string of competitors.
"What's happened in Latin America is that we reached critical mass...there've been more sites up in eight weeks than the previous history of Latin America," said Oxenford. "If we're not incredibly faster than everybody else, we're out of the game."
So far the company has offices and individual Web sites in Argentina, Brazil, Mexico and Venezuela, between which there are about 50,000 products posted for sale. DeRemate plans to add Colombia and two other countries to the network in the first quarter, Oxenford said.
DeRemate, based in Delaware, is modeling itself after San Jose, Calif.-based eBay, the largest Internet auctioneer with an estimated 3.4 million items listed. Oxenford said his company's main challengers are Yahoo and a Latin American company, MercadoLibre, in the race to build up the business.
Besides the two investment banks, DeRemate investors include Fort Worth, Texas-based Texas Pacific Group, an Argentine investment group called SLI Investments and a U.S. investment group known as eQuest. SLI was among the first investors in Buenos Aires-based El Sitio, one of Latin America's largest Internet companies.
The investment will give the five groups a minority stake in DeRemate and dilute the other shareholders' stakes, though Oxenford wouldn't disclose the size of each group's piece of DeRemate.
Prior to the $12 million in investment, 85 percent of DeRemate was in the hands of the company's 11 founders, who come from a various Latin American countries.
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