Internet investment bank Wit Capital Group Inc said it will establish a Japanese arm, with Mitsubishi Corp and IT outsourcing firm Trans Cosmos Inc as initial joint venture partners. The company, to be known as Wit Capital Japan, will be based in Tokyo and plans to be up and running in early 2000. The new venture will offer Japanese investors the opportunity to invest in public offerings and venture capital funds of Japanese companies. It also plans to provide advisory services to companies developing internet-based businesses, including US-based companies who are looking to create joint ventures in Japan. In addition, it will offer online brokerage services to individual investors.
Under the terms of the unique agreement, Mitsubishi and Trans Cosmos will capitalize the venture with $8.6m in a first round of financing, while Wit Capital will contribute intellectual capital and play an active role in managing the new company. In what seems like a good deal for Wit, it will own 60% of the outstanding equity after the initial financing, as well as an option to increase its ownership. Other possible partners are being considered, Wit says, including Nikko Securities Co Ltd, and one or more additional companies will be asked to join the venture within six months. Mitsubishi, which itself was an early VC investor in Wit Capital, says it has worked for nearly a year developing plans for the new firm.
