Asia Catches .com Fever

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    Kenny says Incubasia is planning to nurture 15 or so new firms over the next year and a half. "We are looking for start-ups that take a global view of the markets," he says, "whatever sector it is." That may seem like an ambitious agenda, but in a typical week Cheng and Kenny vet roughly half a dozen business ideas. Clients are welcome to move into Incubasia's office and help themselves to logistical support (including Frisbees). The founders also provide expertise and up to $500,000 in financial assistance, plus one of the Internet's most treasured commodities--hype. "Our job is partly to be the evangelist for start-ups," says Kenny. "We have to get the message out." In return, Incubasia gets an equity stake in each company, usually between 33% and 50%. Armed with business and technological know-how, clients are expected to leave the nest and set up on their own within a year.

    Not every start-up needs so much hand holding. But Kenny and Cheng argue that their services are essential. "We could make the difference between whether a start-up fails or succeeds," says Kenny. To help cope with the long hours, Cheng had a baby room built in the office for his young child. Now, that's taking incubation very seriously.

    Timeless Software Went Public, for Better and Sometimes for Worse
    Danny Cheng didn't graduate from an elite overseas university or acquire information-technology training--and a PalmPilot full of contacts--in Silicon Valley. Instead, Cheng, who is 33, fits the mold of an old-fashioned Asian entrepreneur: he worked his way up from humble Hong Kong beginnings. "My family was poor," says Cheng. "At the beginning of each month, we had to worry about how to get to the end."

    Today, as COO of Timeless Software, a software-solutions firm that started out curing software and Internet-related headaches for the local government and utility companies, Cheng is well past that. Established in 1996, Timeless went public last November as one of two initial listings on Hong Kong's Growth Enterprise Market, the territory's wannabe answer to NASDAQ.

    In 1996 Cheng set out on his own, co-founding Timeless. He and CEO K.K. Cheng developed the firm with $10 million gleaned from an anonymous investor and the company's 15-member management team, many of whom Cheng had known from nearly two decades in the technology industry. By 1997, Timeless had acquired two local systems-integration companies, and by 1998 it had opened its first China branch in Guangzhou and set up a joint venture in the special economic zone of Zhuhai.

    It took 2 1/2 months to prepare the financial and legal requirements for the Growth Enterprise Market listing. Cheng and his team had envisioned a grander debut. They wanted to be on NASDAQ from the outset. But a plea from GEM's chairman, they say, persuaded them to list locally. Timeless had secured $13 million in capital from Taipei-based angel/investor Crimson Asia Capita; the GEM listing raised an additional $58 million.

    Then things got stormy. In a swift year-end deal, Cheung Kong Holdings, billionaire Li's flagship, paid an estimated $5 million for a 2% stake in Timeless. In turn, Timeless agreed to invest $23 million in new offices in the Center, a top-drawer Cheung Kong development. In the old economy, a deal with one of Asia's richest men would have marked one's arrival among the local business elite. But to many investors, Timeless suddenly looked less like a go-go technology firm than an old-fashioned real estate play.

    "Is it a software-systems integrator or a property investor?" asks Internet analyst David Webb, publisher of . He says the office-space purchase deal represents 40% of the IPO proceeds and violates Timeless' prospectus, which pledges to allocate funds raised to working capital. Cheng defends the deal. Still, the market needs convincing. On the first day of listing, Timeless stock peaked at 99[cents]. But by the end of last month, it was down to 71[cents].

    Cheng is projecting a $2.6 million profit for the fiscal year ending March 31, after cumulative losses of $7.7 million racked up during Timeless' first three years. Listing on NASDAQ has not been ruled out. To do that, however, Cheng will have to turn the heads of U.S. investors with flashier results--not just a prestigious office address.

    An Indian Portal Turns into a Quick Conversion to Cash
    Rajesh Jain made one of India's biggest business deals of 1999--and ran. Before the score that netted him $115 million, Jain, 32, operated a website known as IndiaWorld, which posted local news and sports scores, primarily for Indians living overseas. His 20 staff members were squeezed into a 970-sq-ft. warren in downtown Bombay. Profits were minimal. But last fall Jain hit a cosmic payday when he sold his portal company, IndiaWorld Communications, to Satyam Infoway, an Indian Internet service provider listed on NASDAQ. The $115 million deal--one of the biggest Internet transactions involving two Asian companies--gave Jain instant celebrity, a whopping bank account and a desire to leave the Internet rat race, at least for a while, to enjoy his winnings.

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