Metropolis Transactive, holding company of the iAfrica.com portal, has announced a partnership with US-based VerticalNet. The deal will be worth more than $1 million over three years.
According to the companies, Metropolis will acquire the intellectual rights to the VerticalNet platform, allowing it to be used for development throughout Africa. The companies will also interlink their established and future communities.
The alliance seems natural, as both VerticalNet and Metropolis have the same business model where niche business-to-business e-commerce enabled communities are created. These are highly segmented to attract professionals, and established revenue is derived on a commission-basis with added advertising income.
Metropolis CEO Jason Xenopoulos says the deal saves his company three years in establishing itself in Africa, vital time to gain a foothold. "It also allows us a launch-pad into Africa, an area where we see tremendous potential for growth."
But the initial $1 million payment means a R4 million blow to the bottom-line of a company already making a loss. Metropolis says that it will exceed the loss predicted for the period to end June, but will save money in the long run.
The immediate effect is that six new online communities will shortly be launched and will be joined by another four before the end of the year. "We anticipate these revenues from the new communities to start developing towards the end of 2000," says Xenopoulos.
VerticalNet, also a venture capital company without profit to its name, operates 41 vertical communities in the US including Chemical Online and Pharmaceutical Online. Metropolis plans to launch LabAfrica and ChemAfrica during the year.
VerticalNet believes the alliance reflects favourably on its strategy. "Our agreement with Metropolis shows why our business model has vitality throughout the world," says CEO Mark Walsh.
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