Invenfin buys into online chess
Aug 11 2009 18:21
Marc Ashton
Johannesburg - InVenfin, the innovation subsidiary of Venfin, has spent $1.25m buying a stake in a Cape-based online chess community.
"ChessCube", which is operated by Cape-based entrepreneur Mark Levitt, is an online gaming site with about 650 000 unique users - chess players - hailing from 207 countries.
Asked where the idea to launch ChessCube came from, Levitt said he had been approached by British Telecoms in 1997 to develop its online offering.
One of the challenges facing online publishers is the ability to effectively monetise their online user base, and convert free signups into a steady source of income.
Levitt told Fin24.com that the company expects its first premium service - online paid video content - to generate revenue by October 2009.
"I don't want to say too much about it now, but we have two other ideas (that would create revenue) which we expect to bring online in 2010," said Levitt.
In the Western market, many online chess players paid for the service and while they would not be going the "pay-for-play" model, Levitt felt it proved users would pay for content.
Businesses in Asia, such as TenCent, which is owned by JSE-listed media giant Naspers, had found ways to effectively and profitably monetise their offerings, he said.
"What you have here are users who are prepared to spend money buying coaching videos and improving the way they play," said Brett Commaille, who heads Invenfin.
Online retailer Amazon.com has over 100 000 titles available for specialist topics such as poker or chess, Commaille said.
ChessCube could not be compared to other social media platforms like Facebook, which had a generic and broad user base around which it was more difficult to build revenue models, he said.
Asked what had drawn InVenfin to ChessCube, Commaille said the entrepreneurial team was not only passionate but had previously been successful.
The team at ChessCube had grown a multinational user base before looking for additional funding, a track record that was attractive to Invenfin, he said.
Management and angel investors (investors who come in and offer good terms) who had previously been involved with ChessCube had stood out as they had "done a lot on their own".
- Fin24.com
