£1m Investment in Rainbow Network
NewMedia SPARK PLC
31 January 2000
NewMedia SPARK invests £1 million for a minority stake
in Rainbow Network
NewMedia Spark plc ('SPARK') announces that it has agreed to
invest £1 million for a minority stake in Rainbow Network
('Rainbow') (www.rainbownetwork.com). Rainbow is a leading UK
portal catering to the gay and lesbian communities. Rainbow
aims to establish the largest cross media brand in this area,
combining both high quality content and e-commerce services.
Rainbow's management team has a proven track record in off-
line business and credibility amongst the gay and lesbian
communities. Gordon Lewis, founder, has a background in TV and
film, specialising in music videos and commercials. Gordon
became interested in the gay market in the late 1980's and
soon after the Village' brand started with the establishment
of Village West One in 1991, the first openly gay continental
cafi bar. After a successful four years The Village Group'
was sold in 1995. The management team also includes Mark
Fullalove and Ian Lewis, who both worked with Gordon at the
Village Group.
Rainbow currently has a team of 15 full time journalists, 17
regional co-ordinators throughout the UK, 20 freelance
journalists and an army of volunteers, all producing high
quality content for the site. The Company has negotiated
content provision deals with some high profile providers such
as TalkCast and LineOne. Further deals are in the pipeline
which will provide Rainbow with a route into Europe and Asia.
Rainbow is also in discussions with a number of financial
institutions with a view to providing Rainbow branded
financial services products to the gay and lesbian community.
In the last few months Rainbow has been extremely successful
at attracting mainstream advertisers including Bank of
Scotland, Legal and General, Go Airlines, BskyB, M&S, Tesco,
Virgin Megastores and many others.
Commenting on the investment Michael Whittaker, CEO of SPARK,
said:
'Rainbow has very substantial growth potential and we are very
pleased that we have been able to make this investment. The
gay sector represents a broad but focused niche market with a
high disposable income that has yet to be targeted online in
its entirety. Rainbow has a highly credible management and has
the potential to build on its growing reputation in the UK to
develop a global brand, offering international as well as
locally targeted information to the gay community. We are
hopeful that this will become a very valuable business.'
Rainbow Network is the thirteenth investment by NewMedia Spark
since its shares began trading on the Alternative Investment
Market on 28th October 1999. Its other investments are in
Digital Animations Group plc, Bridge4u.com, Linkguard,
Easier!, Skillvest, Hotbox.co.uk, Crocus, WatchMyPrice,
Synaptic Systems, Purple Voice, Merger Market and
Travelstore.com. Of these Digital Annimations has recently
announced a deal with the interactive division of the Press
Association to provide the world's first digital newsreader
'Ananova', and its shares currently trade at 20 times the
price paid by SPARK for its investment. Easier! has announced
its intention to float within the next few days at a price
which will value SPARK's £500,000 investment at £1.75 million.
SPARK is hopeful that the other investments within its
portfolio will show significant increases in value during the
next few months, either by way of later round private
financing, flotation or merger. SPARK continues to investigate
and negotiate a wide range of further investments.
For further information please contact:
NewMedia SPARK 0468 555944
Michael Whitaker 0171 851 7777
Buchanan Communications 0421 413496
Lisa Baderoon 0171 466 5000
Peel Hunt & Company
David Davies 0171 418 8900
Rainbow Network 0467 388591
Gordon Lewis 0171 278 1105
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