Search the Internet           Tips

Antfactory to launch 'Internet hotels'

Paran Balakrishnan in London

Antfactory, the fast-growing London-based incubator company run by British Asian businessman Harpal Randhawa, is about to launch giant 'Internet hotels' where companies house their high-powered web servers.

Antfactory has tied-up with British property company Marylebone Warwick Balfour and has already found four sites for Internet hotels in Dublin, Madrid, Frankfurt and Lisbon.

Developing the four sites could cost around 200 million pounds and talks have begun with banks to raise the funds. Antfactory and MWB have formed a new joint venture MWBKonnect which will run the business.

Internet hotels are huge installations where companies buy space to house their web servers. The hotels house thousands of computers that are serviced by highly trained technical staff and have high-speed telecom links.

MWBKKonnect hopes to build seven more Internet hotels and it has begun a pan-European search for suitable sites. One site is expected to be near London.

In addition, each Internet hotel will also have around 25,000 square feet of serviced office space that will be rented out to corporations. The offices will be fitted with state-of-the-art Internet links and will be ready for occupation by companies with advanced hi-tech needs.

Antfactory will initially invest around 1.25 million pounds for a 32 per cent stake in MWBKonnect and it will invest a further 5 million pounds as project finance.

Antfactory, started by Randhawa in October 1999, is one of London's most successful incubator companies. Incubators like Antfactory act as chief financier and handholding nursemaid to hi-tech start-ups,

The company has tie-ups with Citicorp, Andersen Consulting, Whitney & Co and Allianz, the German insurance giant. Citicorp Venture Capital has lent Antfactory $ 100 million and given it a brief to hunt out potential online winners in Latin America.

Antfactory also has a 30 million pound deal with British bank Lloyds TSB to identify products that can be converted into online banking winners.

Randhawa wants Antfactory to focus on 'old economy' companies like Lloyds TSB that want to make the transition into the Internet age. "The principal players in the new economy will be the old economy companies," says Randhawa.

Antfactory is one of the few incubators that has survived the stockmarket fallout earlier this year. Other incubators saw their share prices slashed and their funds dry up.

The company has opened an office in Bombay and invested in three Indian start-ups.

Money

Business News

Tell us what you think of this report