MOBILE phone entrepreneur Zhenya Tsvetnenko has made his first significant foray into the Australian listed company scene, taking a small but public stake in SmartTrans Holdings.
Last month, Leederville-based SmartTrans announced Mr Tsvetnenko would make a strategic investment of $500,000, amounting to about 2 per cent of the company.
This year’s winner of the 40under40 First Amongst Equals and a previous category winner in Ernst & Young’s Entrepreneur of the Year awards, Mr Tsvetnenko was a pioneer in providing mobile phone services via SMS.
His company Empire Media is developing new technology products, including plans for an iPhone application, which keeps users up to date with chart-topping music.
Mr Tsvetnenko said he remained passionate about the opportunities in technology and believed that SmartTrans had significant potential to develop significant business from an agreement with China Mobile, which has more than 508 million customers, to deliver SmartTrans’ software pre-installed on new mobile phones.
The software allows for the distribution of applications and other digital content including games, animation, music and other multimedia.
SmartTrans expects to receive an upfront platform licence fee, an annual maintenance fee, and in addition will receive an ongoing revenue share with China Mobile for each application downloaded via the SmartTrans application management system.
Although it is not yet a done deal, both parties have executed a memorandum of understanding, which paves the way for the companies to negotiate the terms of a commercial contract as soon as possible.
While predominantly a technology business, SmartTrans also has an interest in mineral exploration, with four projects located in Queensland.
On the technology front, SmartTrans’ main line of current business is the provision of online intelligent transport systems, software and services delivering its logistics and transport solutions software in Australia and China.
Mr Tsvetnenko said he was confident in the listed company’s strategy, having visited SmartTrans’ Chinese operations and met its management.
“They are very competent and have done well with their previous technology,” he said.
Financial aspects aside, Mr Tsvetnenko said he believed his investment was based on a commitment to technology.
“I am looking at various technology companies that are out there that would do well with a bit of a passion injection,” he said.
While the SmartTrans transaction is Mr Tsvetnenko’s first significant listed investment, he has been an active investor both within his own Empire Media group and other private technology businesses.
He has, for instance, a partnership with Perth entrepreneur and Socialite Media founder Tenille Bentley to establish a joint venture in the social media sector.
Mr Tsvetnenko also is undertaking due diligence on a US start-up called Balance Street, which links consumers to financial institutions. He said he had agreed to take a 17.5 per cent stake, subject to the due diligence process.