The Dublin-based corporate communications company, ETel, set up by entrepreneur Mr Sean Melly five months ago, has raised $4 million (€3.88 million) following an initial round of funding.
The investment has been made by four private investors and will account for 13 per cent of ETel equity. This places a value on the company of $30 mil lion.
ETel specialises in obtaining telecommunications licences in the pre-liberalised Central European market. Mr Melly holds a majority stake in the company, while Mr Bernard Somers - a long-time investment partner of Mr Melly - has a "significant" minority shareholding. Mr Robert Miehaus, a former Morgan Stanley managing partner and senior adviser to Dr Tony O'Reilly, also holds a minority stake.
According to ETel chief executive Mr Melly, ETel's investment was oversubscribed by a factor of three within "minutes".
ETel had planned to raise more capital at this stage, but a pending agreement with a major communications technology provider to finance and provide ETel with its switching network reduced its immediate requirement for large amounts of capital.
"The value of the company is increasing daily, so we decided if we could take in just what we need for a few months, it would minimise the dilutive effect of additional investment for the shareholders," Mr Melly told The Irish Times.
Mr Melly said he planned to raise tens of millions for ETel through a major institutional fund-raising by early summer. The latest funding will be used to accelerate ETel's expansion and infrastructure plans in Central Europe. With revenues to date of $6 million, ETel is already up and running in the Czech Republic, where 25 people are employed in Prague offering voice-only services. By summer it will offer Internet and data services, and next month the service will go live in Hungary, where ETel recently secured a licence.
In Poland, ETel is at an advanced stage of securing a telecommunications licence and, according to Mr Melly, the three countries in which ETel has presences are scheduled for telecommunications deregulation within the next three years.
ETel's business model is largely based on Mr Melly's first telecommunications company, TCL. Founded here in 1994, it was one of Eircom's first competitors in the business sector prior to deregulation. In 1996, WorldCom took a 30 per cent shareholding in TCL, then, in 1997, bought out the remaining shareholders for a figure thought to be around £17 million (€21.6 million) - though the exact sum was never disclosed.
