Italy VC & IPO Newsletter

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ITALY
VENTURE CAPITAL & IPO NEWSLETTER
Jan 9, 2001


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Finance News Digest 			VC,  IPOs, TLC,  Internet, Biotech
2001 NASDAQ Outlook & Predictions		3000 by spring, 4000 by fall
Ongoing VC Deals:			Internet,  Biotech,  Software, & more
Nuovo Mercato				Deep mourning:  -32.5, in one month
Profile of the Week:			PINO VENTURES
Hot Internet Jobs				Hot Jobs, Cool Jobs, 
Service Jobs
Conferences				B-2-B  Finance (USA)


ITALIAN ECONOMY & FINANCE NEWS DIGEST

EDITORIAL - Mourning continues. Bold moves by "wild" Tiscali. Time 
for bottom fishing.
Since our last visit to the Nuovo Mercato the Index dived deep losing 
-32. 5% of its value! But Tiscali ( -66% since November 17 and - 17% 
below IPO price) continues to gamble on size. After acquiring 
LibertySurf it is now #2 in Europe. Will this strategy pay-off? It 
doesn't matter, since it is the only viable strategy left. AOL is the 
case strudy here. The New Economy has reached maturity atŠŠ Internet  
speed! Only the strongest will survive . Size is certainly one of the 
criteria. Tiscali and other premiere Internet companies, to thrive, 
will have to be show that they can meet the others. And fast. The 
alternative is quick oblivion. Remember Priceline and eToys?

OUR 2001 OUTLOOK: NASDAQ at 3500 by late spring and above 4000 by late fall
Stock market crashes create a cork upstream at the VC level. This 
bodes well for consultants and service providers (like us!!), who are 
flooded these days with deals they would never have seen otherwise, 
given the speed at which they were being sucked out of the market 
only few weeks ago! 
Are we the only ones rejoicing? We believe so, but it won't last for 
long. Being good thermometers of changing moods, by measure of our 
own metrics (the deal flow and the desperation of start-ups trying to 
raise money in negative market conditions like the present one!), we 
predict that the market will turn north in the spring. The rate at 
which new companies are being created is creating an avalanche way 
above, putting pressure on the VC downhill. VC cash will 
start-flowing again into technology and this will generate new 
positive sentiment. The positive wave will hit market in late spring 
and build-up height and weight by late October.
Our prediction: we predict that NASDAQ will reach 3000 by the end of 
spring and  4000, by a good measure, by late fall. Corrections will 
occur along the way but the direction will continue to be north for 
the rest of the year. What happens after that, we will tell you next 
time there is some free space in this newsletter, or if you ask
us. But dont' take us too seriously. The money is yours. Carry out 
your own research.

For the long term investor: now is the time to do  thorough raking or 
bottom fishing, wharever you want to call it. You may never have 
another opportunity again! This holds true for all technology 
markets, all the way down the line, from NASDAQ to Nuovo Mercato.
If you want to know our picks, no strings (or fees!) attached, send 
us an email and we will share with you our selection of biotech and 
tech stocks to BUY for the long term.


VC DEALS
Eteknon, a DNA probe company. Founded by Daniele Primi, director of 
biomolecular research at DiaSorin (ex-Fiat) now controlled by 
American Standard (AS), with backing from eArchimede, one of the 
latest incubators to see the light in Italy. A likely spin-off in 
light of AS disengagement from the healthcare diagnostic market.

ONGOING VC DEALS
We are updating this section with a number of fresh deals. If we were 
asked which deals would we recommend? Even if you don't ask we will 
voluntarily share with you our thoughts.
Biotechnology first. Biotech addresses a fundamental need of people, 
i.e health. Biotech is protected by patents. And the healthcare 
market is huge, hundreds of $billions a year, and already here. Focus 
on biotech plays which provide solutions for drug companies or new 
revolutionary therapies for hard-to-treat diseases, such as cancer, 
AIDS, autoimmune diseases and the like.
Internet & other ICT: forget e-commerce and basic B2B-commerce. Focus 
on plays which offer efficiency solutions at one-point or another 
along the chain. Optical routing and switching, data compression and 
streaming, data storage & retrieval, network security and 
personalized client security clearance systems, efficient 
browser-based enterprise management platforms, unified  ICT & 
utilities platforms, e-government solutions, are some of the areas 
where strong needs still exist.


NUOVO MERCATO NEWS

IPOs since November 20: 5 IPOs
DMAIL.IT (Direct Internet marketing) , EL.EN (Laser technology) , 
ENGINEERING INFORM (IT services), FIDIA (Finance) and REPLY (Internet 
Technology) are the new entrants. They all left blood on the ground. 
Given market conditions, courageous, or desperate for cash? Both, and 
we agree with their strategy. Better now than never. Besides cash, 
after brains, is the most precious asset in a New Economy company, 
regardless of what others say. But now that they have it they better 
put to good use in their shareholder's interest, i.e. sales and 
earnings, and not some wild technology scheme for the betterment of 
humanity.

Impending IPO:  (full IPO pipeline schedule - request it via email)
None , but several are scheduled to hit market, as soon as the sun 
appears on the horizon again! Right now we are in the middle of a 
blizzard.

Veterans
Since November 17th, the last time we visited NM (we have been damn 
busy on a number of other more urgent projects. Sorry!, but we too 
have bills to pay)  32.5% of the Index value went up in smoke.  And 
in the eyes of both sophisticated and unsophisticated investors. How 
we feel for the latter. Lured to NM by the media hype on the New 
Economy and quick bucks, many left on the ground serious personal 
money! We have been through this other times before and we know how 
it really hurts.
Fund managers: react quickly and realign your portfolio to changed 
market conditions now! It is too late to avoid damage, but you can 
still limit it, for your investors.
Individual Investors: your lesson is that you have to exercise utmost 
control on discipline and greed. Set your gain goals and stick to 
them whatever others say. Your goal should be to sell whenever you 
have made a net gain worth twice the interest rate in your country. 
This should be anywhere between 12 and 20%. Don't be too greedy. Sell 
when you are ahead! (We are assuming you know what to buy; if you 
don't ask us, at your own risk, for suggestions)

The Gainers : none
The losers : all  - Tiscali in the major worldwide league. e-Biscom 
in the trench.
Worth mentioning is Tiscali, the boldest of them all. Tiscali left on 
the ground 60% of its value, in spite of its aggressive market 
expansion strategy which led to two major takeovers in the last 60 
days. Soru is either a bold visionary or another hopeless dreamer. We 
think the first is the answer , and we concur with Tiscali's 
strategy, which by the way is the only viable strategy now, if the 
lesson coming from AOL is worth anything. AOL raked up 70% of all 
e-commerce transactions this past Xmas season, by the brute force of 
its subscribers base. Is Soru the European answer to Case? We think 
the wiry Sardinian is the closest that can be found in Europe. But 
now he better start milking its 10+ million subscribers for revenues, 
or elseŠŠbye bye! The difficulties that Soru faces are exemplified by 
the decision of its founding VC partner, Pino Venture, to sell its 
3.5% as soon as market conditions improve. Although the official 
reason is normal asset turn-over, what strikes us as suspiciously 
coincidental is the timing of the announcement. Trouble ahead? Not 
the first time. If Soru sticks to revenues and earnings, Tiscali will 
survive and thrive. We suspect however that Soru, now No. 2 in 
Europe, will seriously consider a further gamble to reach the No. 1 
spot. Maybe t-online, the troubled Deutsche Telekom Internet play? 
Why not! Afterall Sommer has a dire need to sort out the mess at 
t-online, severely crippled by management blunders, and of cash to 
replenish treasury depleted by the UMTS gamble.
We view Tiscali as a wild card in the short-term. We recommended only 
to those that have bear's hair on their chest and deep pockets.
The other major leaguer in NM, e-Biscom, also got a baseball club on 
its head and bled 33% of its value, leaving it at -42% below IPO 
price. e-Biscom is a broadband player which has been peddling in 
risky consumer territory of late. Its business model presents two 
areas of risk: broadband is quickly becoming a commodity surplus item 
and consumer Internet is a money-loser. On the positive side, the 
management is one of the best around and will put up a good fight, we 
believe.

Other NM Companies:
We are pessimistic on all other NM market plays dealing with consumer 
Internet. Concentration is in the works. Exemplary is the 
indiscretion on the sale of Kataweb, a to-be IPO star of the Italian 
portals, which grew (and burned cash) at a torrid pace in 2000. 
Rumors are that the controlling group is probing the market for a 
buyer.
Concentration is in the works also in the trading-on-line sector. The 
Italian market is too small to have more than 3 companies. 
Consolidation is also in the works for software companies providing 
platforms B2B or B2C. In all these sectors, focus on companies with 
earnings and cash. They are the ones that will survive the shake-out.

Nuovo Mercato Index : -32,52% since Nov. 17 and -17,39% since IPO

INTERNET & TLC

Internet Companies
Ciao.com (Fiat)  and Kataweb (Espresso) are rumored to be on the 
block. Denials are feeble and dictated by the fact that controlling 
shareholders are public companies.

UMTS
Telecom companies in the whole of Europe are licking their wounds 
(indebtedness) after the risky gamble on the license casinò. Worst 
hit is Deutsche Telekom. Vodaphone and Telecom Italia are in a much 
better share, debt-wise.

Telecom Italia +SEAT+ Telemontecarlo

SEAT has taken a severe market beating and is now at its lowest 
level. The group led by Pelliccioli seems having trouble 
communicating clearly where its business model is heading. The 
impression is that they are still trying to find their way in the New 
Economy, in spite of all the hype on being a multimedia company.

Other TLC News
The acquisition of Infostrada by Wind, the TLC operator controlled by 
utility giant ENEL, is been scrutinized by both EU and Italian 
Antistrust authorities. We don't foresee major obstacles ahead. 
Scrutiny is dictated by political noise surrounding the acquisition.

Biotechnology and Pharmaceuticals
European biotech is rapidly catching up on the US, with over $2 
billion in IPO funds raised by 27 continental companies in 2000. 
Their US counterparts, 67 of them, raised in excess of $ 6 billion 
from IPOs. With the strong wind behind biotech accomplished a 60% 
gain in 2000, against a net loss of about 40% of Nasdaq. Flush with 
cash, the whirlwind  of deals in the biotech industry will likely 
continue also in 2001. 
Too bad that Italian biotech is still largely on the sidelines, in 
spite of the excellent research done in this country.
Biotechnology scientists: do you have the desire to set up your own 
company? Ask us. We can show you the way!

PROFILE OF THE WEEK

Pino Venture Partners S.r.l. and Pino Partecipazioni S.p.A.

Founded in Milan in 1998 by Elserino Piol and Oliver Novick, Pino 
Venture Partners is a consultant company specialized in 
telecommunications, Internet e new media and in private equity. Pino 
Venture Partners and Pino Partecipazioni S.p.A. (a subsidiary of Pino 
Venture founded in 1999) are advisor to Kiwi I and Kiwi II 
respectively.
Umberto de Julio,  Emanuele Marcianò and Emanuele Levi joined Pino as 
partners in 2000. The staff also includes about 10 financial analysts 
and 5 associates and consultants . The strengths of Pino are: a track 
record of success in venture capital in US and Europe; industry and 
technology experience; ability to generate deal flow through contacts 
and a network built-up over many years; deep knowledge of the 
European, and particularly Italian and Spanish, environment; ability 
to create management teams and to assist entrepreneurs and management 
in the development of high-tech companies; ability to create 
strategic and business link for Investee Companies; experience as 
founders and investors in start-ups and technology companies; network 
of business contacts in Europe, North America and Asia.

Kiwi I and Kiwi II are two early stage, high tech venture capital 
investment companies.
Kiwi I, launched in October 1998, is a 110 million Euro investment 
company focused on telecommunications, Internet and new media. First 
to identify Italy as an early-stage venture capital opportunity, is 
"lead investor" in Italy: 51 investments in 20 months (49 still in 
portfolio). KIWI I invested in 19  telecom companies (of which 9 are 
regional.com), 31 Internet companies and in 1 media company. KIWI I 
realized 38 investments in Italy and 13 investments in Europe and 
USA. 12 initiatives are based on ideas originated by Kiwi. Some 
names: Tiscali, Vitaminic, Lombardia.com, Blixer, Direct.it . Pino 
Venture Partners is Advisor and provides its expertise in 
identifying, evaluating and monitoring investments.
Kiwi II, launched in April 2000, total Investor commitments of 500 
million Euro, is focused on telecommunications, HW and SW 
infrastructure, Internet (particularly B2B) and new emerging 
technologies.  Europe is the main target, special focus on Italy and 
Spain. As of September 2000 it has made 32 investments. Kiwi II 
management company has entered into advisory agreements with Pino 
Partecipazioni S.p.A. that is also co-investor with Kiwi II in 
Italy.      Kiwi II investment program:
- "Kiwi I like" investments: building a portfolio through 
opportunistic investments in early stage in Italy (and Spain), 
focusing on initiatives often applying concepts and technology 
already successful in more advanced markets, basing the strategy on 
active involvement with emerging and growth oriented entrepreneurial 
companies (well defined market need, strong differentiation and 
significant barriers to entry), giving priority to enterprises where, 
through Pino Partecipazioni, Kiwi can add significant value
- Coinvestments: in Europe, US and Israel, Kiwi has access to a 
partners network of venture capital relationships. This network 
includes: 3i, 4CV, Alta Berkeley, Amadeus, Invesco and Part'com. Kiwi 
coinvests with strong lead venture capital operators.
- "Major projects" : Kiwi takes the lead to enter a new business in 
Italy (and Spain) and to formulate strategic initiatives 
(anticipating industry changes); Kiwi provides, through Pino 
Partecipazioni, management expertise (drawing on years of operational 
experience and developing synergies among investees), builds 
successful management teams, and raises money to further grow the 
company and increase value . Kiwi II key investments are: Paperand, 
Mover, MotoreAzione, Venere.it, 2Net, SpesaClick, Wikey, Zoombla.
http://www.pino.it

TECHNOLOGY TRANSFER OFFICE
http://www.help-finance.com/16patents.htm

INTERNET JOBS & CANDIDATES
http://www.help-finance.com/19jobs1expo.htm

CONFERENCES & SYMPOSIUMS
http://www.help-finance.com/8brain.htm

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