Investment in Virool

RNS Number : 0847L

TMT Investments PLC

30 August 2012

 

30 August 2012

TMT INVESTMENTS PLC

("TMT" or the "Company")

Investment in Virool, Inc.

The Board of TMT is pleased to announce the completion of an investment in Virool, Inc.  Incorporated in Delaware, Virool, Inc. ("Virool") has developed a self-service platform that allows video creators to distribute videos that are over 30 seconds long to targeted audiences across Virool's network of online publishers, blogs, social games and mobile apps. Virool has developed an application that makes it very easy for publishers on Facebook, iOS, Android, blogs or other media channels to plug into the Virool network and start making money by providing advertising space.

TMT's investment consists of a US$400,000 unsecured uncapped convertible promissory note in Virool (the "Note") on the following terms:

·    Interest rate - 2% per annum.

·    Term - the Note will be repayable in whole or in part at par at TMT's option 24 months from the date of issuance of the Note.

·    Conversion -

o Optional conversion: any outstanding principal and unpaid accrued interest on the Note may be converted after 24 months at TMT's option at an equity valuation equal to an agreed open market value.

o Automatic conversion: any outstanding principal and unpaid accrued interest on the Note will be automatically converted into Virool's equity securities upon the earliest of (i) closing of the next equity financing of at least US$5,000,000, or (ii) a change of control of Virool, in either case at an equity valuation equal to 80% of the equity valuation of Virool applicable to the next equity financing or change of control.

Definitive agreements for the transaction were entered into, and the transaction was completed, yesterday.

"There are over a million videos uploaded to YouTube every day, with 95% of them getting less than 1,000 views," says Alexander Debelov, co-founder and CEO of Virool.  "No matter how funny or appealing your video is, it is not going to go viral unless enough people discover and begin sharing it.  That's where Virool comes in.  Virool helps anyone with a video to get noticed.  Although Virool was launched only a few months ago, the company is seeing explosive growth, both in terms of the number of videos it serves and the amount of revenue it is generating.  It already has over 7,000 advertisers using the platform, and is adding about 250 new advertisers every day, providing its advertising clients with more than half a million video views a day."

Alexander Debelov graduated from Babson College with a degree in Technology Entrepreneurship and Design.  At Babson, he was recognized as the Most Outstanding Entrepreneurship Student, winner of John H. Muller Business Plan competition and was named amongst Top 5 College Entrepreneurs by Entrepreneur Magazine in 2010.  While at Babson, Alexander co-founded The Kairos Society, world's largest student entrepreneurship organization today.

Alexander Selegenev, Executive Director of TMT Investments PLC, commented: "The strong growth in video adverts means that it is hard for a company to deliver its videos to the right audiences.  Virool's video advertising service is very well positioned to become an "AdWords for video", especially for small and medium-sized advertisers, offering a highly targeted, transparent and results-based service."

To date, Virool has raised capital from such recognized venture capitalists as Y-Combinator (incl. Andreessen Horowitz, SV Angel, Yuri Milner, and General Catalyst), Thomvest Ventures, 500Startups, NetPrice, Global Venture Alliance, Plug and Play Ventures, Ryan Tu, Paul Buccheit, Garry Tan, Harj Taggar, and Alexis Ohanian.

Virool did not have any financial accounts in respect of the year ended 31 December 2011.

For further information contact:

TMT Investments Plc Mr. Alexander Selegenev www.tmtinvestments.com	[phone] [e-mail]
ZAI Corporate Finance Ltd. NOMAD and Broker Marc Cramsie/Irina Lomova	[phone]
Kinlan Communications David Hothersall	Tel. [phone] [e-mail]

About TMT Investments

The Investment Policy & Strategy

The Company's objective is to generate an attractive rate of return for Shareholders, predominantly through capital appreciation, by taking advantage of opportunities to invest in the TMT Sector. The Company aims to provide equity and equity-related investment capital, such as convertible loans, to private companies which are seeking capital for growth and development, consolidation or acquisition, or as a pre-IPO financing.

In addition, the Company intends to invest in publicly traded equities which have securities listed on a stock exchange or over-the-counter market. These investments may be in combination with additional debt or equity-related financing, and in appropriate circumstances in collaboration with other value added financial and/or strategic investors.

The Company is not geographically restricted in terms of where it will consider making investments. It will consider any geographical area, to the extent that the investment fits within the Company's investment criteria. The Directors and Consultants have expertise in emerging markets and, in particular, in Russia and the Commonwealth of Independent States. The Company will not be subject to any borrowing or leveraging limits.

Private Companies

The Company will target small and mid-sized companies and will seek to secure at least blocking stakes and board representation, where it considers that the Company and/or an investee company would benefit from such an appointment. The Company will consider making equity investments in lower than blocking stakes only where it sees ways to increase the stakes to blocking or controlling stakes at a later date. Each investment is expected to be at least US$250,000.

The investments targeted by the Company will aim to support rapidly-growing private companies to increase market share and achieve long-term shareholder value. It is envisaged that if the Company invested in a private company prior to that company listing on a stock market, the Company would retain a part of its investment in the listed entity going forward. The Company intends to work closely with the management of each investee company to create value by focusing on driving growth through revenue creation, margin enhancement and extracting cost efficiencies, as well as implementing appropriate capital structures to enhance returns.

Public Companies

When investing in public equities, the Company will seek to select companies with a dominant market share or strong growth potential in their respective segments. No restrictions will be placed on the size of public companies in which the Company may make an investment. The Directors intend to make investments in companies or businesses with attractive valuation, growth potential, with competent and motivated management, which enjoy brand recognition, have scalable business models, have strong relationships with customers and have in place transparent accounting policies.

Realisation of Returns

The Directors will, when appropriate, consider how best to realise value for Shareholders whether through a trade sale, flotation or secondary refinancing of the investee companies. The proposed exit route will form a key consideration of the initial investment analysis.

The Company expects to derive returns on investments principally through long-term capital gains and/or the payment of dividends by investees. The primary ways in which the Company expects to realise these returns include: (a) the sale or merger of a company; (b) the sale of securities of a company by means of public or private offerings; and (c) the disposal of public equity investments through the stock exchanges on which they are listed.

For private investee companies the Company believes that its typical investment holding period should provide sufficient time for investee companies to adequately benefit from the capital and operational improvements resulting from the Company's investment. The targeted holding period shall be reviewed on a regular basis by the Company, but it is expected that this will typically be between two to four years. For public equities the Company's objective is to maximise capital appreciation. Following the acquisition, the Company will continue to conduct extensive research and monitoring of the investment. Importance will be placed on the timing of any disposal which will follow a thorough review of market conditions and those reports and sources that are available to investors. Should the Company consider that the capital appreciation of a particular public equity investment has reached its peak or is likely to or has begun to decline, then the Company will consider the sale of that investment.

 

END

 

 

MSCVBLBXLVFLBBD