Mark Shuttleworth's venture capital firm Here Be Dragons (HBD) is poised to buy a stake in search engine marketing company incuBeta, following the completion of a due diligence exam.
Julia Long, HBD head, says talks are under way about what size stake the company will take and possibly what the board representation will be.
The stake will be part of HBD's Fund2 that is focused on early stage ventures and will allow the venture capital firm to spend up to R150 million on new ventures over the next two years. Investments by HBD Fund2 take stakes worth between R10 million and R25 million.
A recent acquisition by HBD was in EDH, a developer of products for the sport, defence and inspection markets.
"We are looking at incuBeta because of its technology and its profile in the market. It seems to be a very dynamic company," Long says.
Vinny Lingham, incuBeta's chief strategy officer, says HBD is one of the few, if not the only, South African venture capital companies that understand the Internet and the developments around it.
"HBD is not afraid of the Internet, particularly the advent of Web 2.0 that builds on the infrastructure laid in the early dot-com boom period," he says.
IncuBeta recently received the minister of science's overall award for excellence in the Technology Top 100 competition. In the US, it won the Commission Junction 2006 Horizon Award for Global Vision - the last winner of which was eBay.
Lingham says incuBeta is readying itself to become more involved as a Web 2.0 company as it prepares to launch SynthaSite, a tool for publishing and managing content on the Web aimed at low-tech and advanced users.
The companies say the deal should be concluded within the next week or two.
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