Ireland’s Sunday Business Post has reported that “early investors in early investors in Dublin online firm BuildOnline are nursing losses after the firm merged with a US company”.
Founded in Ireland, BuildOnline quickly relocated to London during the dot.com boom, and – positioning itself, first, as an e-construction marketplace, then, a provider of construction collaboration technologies (aka: ‘extranets’) – it then burned its way through around €30 million of funding raised in 2000 and 2001. Late last year, it merged with US firm Citadon to form CTSpace (see post), raising new funds from two American funders, Insight Venture Partners and GRP Partners (see post).
According to the newspaper’s Gavin Daly: “Industry sources said that BuildOnline’s early investors, including Delta partners in Dublin, had lost money on the deal.” It then describes BO’s final financial maneouvres before the Citadon merger:
“In the financial year to the end of March 2005, BuildOnline (Holdings) had turnover of almost €6.2 million [£4.2m] and made a pre-tax loss of €1.6million [£1.1m].
It had an accumulated loss of €35.8 million [£24.4m] at the end of the financial year.
According to the firm’s accounts, BuildOnline received a bridge loan of €3 million [£2.1m] in August 2005 to finance its future development. In May 2006, the loan was converted into shares in the company, and the firm raised a further €2 million [£1.4m] in equity funding.
The investors in that round included Mark Suster, the former chief executive of BuildOnline. The firm said it would use the money to establish US operations, increase research and development activities in India and open new offices in the Middle East and central and southern Europe.”
This confirms the sorry picture of BO finances that I described in January, looking at its UK business (see BuildOnline UK position worsened). Assuming ‘BuildOnline (Holdings)’ is the overall holding company for all BO businesses, we can see that two-thirds of its 2005 turnover originated from the UK business; the latter also accounted for half the group’s pre-tax loss. In other words, in the year to March 2005, BO’s non-UK operations turned over about £1.4m and made a loss of about £0.5m.