IT Capital's venture stung

By PETER GRIFFIN

A $1 million investment by venture capital firm IT Capital in Australian e-commerce developer Streamlink is in doubt because of Streamlink placing itself in voluntary administration.

IT Capital, of Auckland, committed $2 million to Streamlink in April, but only half that amount has so far been put into the company.

IT Capital's vice-president of investment, Simon Brown, said the company had decided against providing any more money when it became obvious that the market for business-to-business e-commerce packages had fallen over.

"The market in which Streamlink is working has completely unravelled in the last three months. Even tier-one competitors of Streamlink's, like Ariba and Commerce One, are not making any sales."

He said the eight-year-old Streamlink had been attracting interest from several blue chip customers when IT Capital first put its money in.

Although Streamlink had won business from customers, including Qantas and Coca-Cola, company founder Martin Fisk said at the weekend that it had not signed a deal since October.

He put the sagging market conditions down to the "risk adverse" nature of companies unwilling to embark on ambitious spending programmes.

"It seems that supporting local industry is too risky for most Australian managers, including the Government," he told the Australian Financial Review.

Whether IT Capital would retrieve its investment would be decided by the company's administrator, Greg Hall, of PricewaterhouseCoopers.

"We'll see what the administrator decides," Mr Fisk said. "But there is not a great list of creditors lining up."

Two parties are interested in buying Streamlink, which has 40 shareholders.