Wit Capital Expands Into Europe

Online investment bank Wit Capital (Nasdaq: WITC) announced yesterday that it is partnering with privately held enba, a European online-only financial services company, to launch a European investment banking firm.

The new firm, to be known as Wit Capital Europe, will be based in Dublin, Ireland and is scheduled to open in early 2000. The partnership is subject to regulatory approval.

Wit Capital will own 55 percent of the joint venture, with enba owning the remaining 45 percent. The companies will contribute a combined $10 million (US$) to the venture in proportion to their equity stakes. Both companies will also license their technology to the new firm.

Wit Capital Invests In Enba

Wit Capital will also acquire 12 percent of enba in exchange for approximately $31 million in stock.

“Combining enba’s investment in technology and brokerage development experience in the European markets with Wit Capital’s revolutionary model for capital formation will be a major benefit both to individual investors as well as issuers throughout Europe,” said Ronald Readmond, president and co-CEO of Wit Capital.

Wit Capital Europe Will Resemble U.S. Operation

Like Wit Capital’s operation in the United States, Wit Capital Europe will offer investors the chance to invest in IPOs and other securities offerings. The new firm will also provide research and online brokerage services for its customers. Wit Capital Europe says it will provide advisory services for companies developing online businesses in Europe, including American companies that are looking to start joint ventures.

Wit Capital will work with enba to offer an integrated consumer banking and brokerage service for individual investors throughout Europe. The companies will begin by focusing on the United Kingdom, France and Germany.

Wit Capital Europe will also participate in Wit Capital’s global network of affiliated investment banking and brokerage firms. The network hopes to create a platform that will facilitate online capital raising for companies across multiple countries and allow investors to trade securities in multiple countries.

This network also includes Wit Capital Japan, a joint venture that is a developmental stage. Partners in Wit Capital Japan include Mitsubishi.

Notable investment banks that have invested in Wit Capital and enba are expected to be a boost for Wit Capital Europe. Goldman Sachs has a stake in Wit Capital, while Morgan Stanley has a stake in enba.