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SEE TOP 100 Insurers
Interview: Investment Network Merar Connects Underfunded Asia Pacific, CEE and Africa SMEs with Financial Backers Merar (www.merar.com) provides a global web-based platform in English, Russian, Turkish and Chinese where business managers and owners promote their companies in need of growth capital or exit to interested investors and investment intermediaries.
opportunities in markets of Asia Pacific, Central and Eastern Europe and Africa. They read analysis and reports about new and emerging opportunities and promising returns but do not always have the tools to identify interesting and broad enough targets and build up their investment portfolio.
Ralitsa Bobochikova, Managing Director, Merar
Q: What was the business rationale behind the launch of the platform? Why the focus on emerging markets? A: Emerging markets are where business opportunities are greatest and that is no news. We believe that the strongest prospect for sustainable growth in emerging markets is private entrepreneurship and private business. Unlike on developed markets, however, there is less awareness of financing and capital opportunities. Similarly, for investors looking to engage capital effectively, there are fewer established channels to identify potential targets. Here is a simple example. Every business needs money to grow, survive a rough patch or just spread out the risk. Very often, and especially with the ongoing financial crisis, businesses struggle to get bank credits. On the other side, we have the world of angel investors, venture capitalists, private equity and mezzanine funds and a lot of companies looking for good merger and acquisition opportunities to expand. Most of them, led by potentially high internal rates of return, are looking for investment
Here is where Merar strives to help. Our goal is to help businesses and investors meet, establish contact and start negotiations. To facilitate the contact we operate in 4 languages (Russian, Turkish, Chinese and English) and all projects descriptions and investors’ CV are translated into English. Q: What investment opportunities are currently available on the markets covered by the platform? What are the main industries which Merar’s platform is currently attracting? What geographic areas are investors flocking to? A: Currently we have listings for investment opportunities from 21 countries across 26 industries with a combined value of almost $2 billion. Opportunities in India, China and Russia have a significant share of the listings on the platform. This shows the pent-up demand for investment in those countries and the inevitable growth of private business and entrepreneurs in all industry sectors. Q: What are the key factors that would make a business in the regions covered by the platform attractive to investors? What role does innovation play in this process? A: Each emerging economy has its particular advantages, whether it is the focused support and entrepreneurial energy of investment and technology centers such as India’s Bangalore or the overall macro-economic growth outlook in places like Vietnam.
For Eastern Europe, which is the focus of this publication, it seems clear that wewill see a large number of well-managed privatelyheld businesses coming to the market over the next decade as the original founders, who set up the operation following the fall of communism, go into retirement. This will provide the fuel for increased private investment throughout Eastern Europe and the more efficient use of capital. We would then expect those companies to develop under new ownership both eastwards into Russia and Asia, as well as to compete head-to-head with western European firms. Q: What are the challenges facing technology/ innovation-based businesses in developing markets? A: As with other businesses, perhaps the two main challenges are human resources and financing. Innovation companies need to attract highly intelligent and technically skilled individuals with financial and business savvy and all emerging economies potentially suffer from talented personnel moving to the U.S. and Western European universities and companies. condly, corporate failure can have heavy legal and personal implications in many emerging countries, which restricts entrepreneurship and helps maintain the status-quo of established entities. Last but not least, the business environment for innovation and high-tech companies in more developed countries can be more forgiving. In the U.S., for example, there are well-established mechanisms for companies to make their pitch and attract debt financing and venture capital and this is the process that Merar hopes to facilitate in emerging markets.
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