Goldman leads e-Commerce deal in Taiwan

by Shu-Ching Jean Chen
reporters@thedailydeal.com

TAIPEI: U.S. investment bank Goldman Sachs & Co. unveiled its first business-to-business e-commerce deal in Taiwan with a $10 million joint investment in Best3C Inc., a San Jose, Calif.-based company founded last year by two Taiwanese entrepreneurs.  Best3C said it could offer one-third of all electronics products produced by Taiwan companies. The Web site, which started in January this year, has hosted $2 million transactions online with sales of $25 million expected by year end.

The Web site, which handles online transactions for nearly 200 electronics products, last year approached Shirley Lin, managing director and co-head of Goldman Sachs principal investment area in Asia. This resulted in Best3C issuing preferred B shares to Goldman and nine other Taiwanese institutional investors, including D-Link Corp. , in which Goldman has taken an equity stake, Mitac Computer, Pacific Electric Wire and Cable, Pacific Ventures, Leo Systems and Bank Sinopac.

Paul Wang and Jack Li, the two founders, will exercise a controlling stake in the enlarged capital base of $12 million. George Huang, corporate treasurer of the Acer group, Taiwan’s largest computer maker, will take a personal interest in Best3C’s preferred A shares.

Wang, former long-time hi-tech journalist, said Goldman has requested the company not to reveal the new stock holding structure. "We can only say no one is having more than 5% shares," Wang said. The new investors will each hold between 2.5% and 4% shares.

Goldman has invested $2 billion in some 200 hi-tech companies since 1995, including 30 in Asia.

Goldman’s first foray into Taiwan was made in 1994 with President Chain Store Corp. , which runs the highly successful 7-Eleven convenience store franchises. This was followed by Giant Manufacturing Co. , a bicycle maker, and Pou Chen Co. , the world’s largest shoe-maker, which contracts with Nike and Reebok. Lately, it has shifted to hi-tech and Internet-related businesses such as D-Link, Sipix Group, pAsia, Clarent and now Best3C. These eight companies represent Goldman’s total equity investment in Taiwan of $333 million.

Taiwan supplies about 40%, or $42 billion, of the world’s electronics goods each year. The business is growing fast and is expected to top $55 billion in the next three years.