Xelector picked out for EU23.5m funding

Contributors to the round included Apax, Aureus, CGU, Invision AG, Morgan Stanley Dean Witter, Nextech Venture, Overseas Union Bank and Vertex. Until now the company was financed by enba, the Dublin-based incubator specialising in the creation of online financial services.

CEO Jussi Laurimaa said about the funding round: “Today's announcement just goes to show that, despite the hype, a solid business concept with demonstrable path to profitability can still attract the valuation that it deserves.”

Laurimaa said the new funds would be spent mainly on developing the company's technology and service infrastructure, which Laurimaa described as a “fairly serious commitment”.

According to Laurimaa the company will require extra funding in the future, but in deference to the company's investors he would not say when. The fundraising mechanism will depend on market conditions at the time, said Laurimaa.

Xelector plans to go live in the UK by the end of June 2000 and roll-out into between five and ten other countries by the end of the year. Once up-and-running Xelector will allow consumers to compare, select and buy consumer financial services and utilities products. It will be marketed on a white-label basis, allowing partner websites to brand the service as their own, an approach Xelector believes will keep down its marketing expediture.

The company aims to draw revenue from two sources: transactions done on its service and the sale of data about the usage of is service.

Laurimaa admitted that margins on the transactions service would be thin, because it would be a commodity offering facing cutthroat competition. Fatter margins, according to Laurimaa, will come from the sale of data, for which the company hopes to justify premium prices by also providing analysis.