Attractions of Alternext
Article Date: Oct 23 2008
Luca Ascani, Goadv
Italian internet entrepreneur Luca Ascani explains why he chose Paris-based Alternext over AIM to list his latest venture, GoAdv.
Luca Ascani already has two profitable exits behind him and he’s not even 30. He sold shopping comparison website BuyCentral to Lycos in 2004, while his sale of digital media agency ADVance in 2007 netted €1.8 million (£1.4 million).
Both these were private companies with little or no initial investment. For his third and most recent venture, online media company GoAdv, Ascani took a different route.
‘We raised money twice, once when we listed on [European growth market] Alternext last year raising €5.5 million, and the second time in summer, when we raised a convertible bond for €11 million,’ he says.
Both times he was lucky. The initial public offering (IPO) took place on 1 August 2007, narrowly missing the beginning of one of the biggest stock market crashes in living memory, while the convertible bond was raised by investment bank Bryan, Garnier & Co on 31 July this year, six weeks before the dramatic collapse of Lehman Brothers.
Ascani might lead a charmed life, but he’s also delivered for his investors. Operating profits at GoAdv, which uses content-driven websites to help clients sell their products, are up 315 per cent to €2.4 million for the first half of this year on a turnover of €18.4 million. The company’s share price has almost doubled since IPO, soaring from €5.35 to €10.20, and is down just seven per cent from its peak.
A suitable alternative
Naturally, he has no regrets about preferring Alternext to London’s growth market, AIM.
‘I had the option of AIM, but I felt that AIM had too many companies,’ he says. ‘There are nearly 2,000 of them, while there are only around 100 [on Alternext], meaning that you have more visibility.’
The market is well suited to internet ventures, Ascani claims. ‘Of the companies on Alternext, 15 to 20 are internet companies, which means you have a ready-made market of investors and internet journalists.’
'We did all the work in four months – from idea to IPO'
The third reason for preferring Alternext was a pragmatic one. ‘The cost of a listing is less than on AIM, and regulations are less stringent,’ he explains. ‘I had the idea for the introduction in March 2007 and we did all the work in four months – from idea to IPO.’
With such a rosy experience of the stock market, it’s not surprising that Ascani hasn’t got a bad word to say about it. ‘Having a public company helps with long-term strategy – you need to be more organised, and there is always the benefit of access to capital,’ he enthuses.
With an interest rate of six per cent, the convertible bond represents relatively cheap money for Ascani and co-founder Salvatore Esposito, allowing them to hold on to their 80 per cent stake in GoAdv. With cash in the bank, Ascani is looking at acquisitions.
‘We are very opportunistic, always,’ he states. ‘The only problem is that though valuations are falling, [vendors] have a number in their mind which is just a number, not linked to reality.’
