JobStreet.com Raises $2Mil Amid Tech Meltdown

By Julian Matthews, Newsbytes
KUALA LUMPUR,

12 Jun 2001, 1:12 PM CST

Amid turbulent times for the tech sector, at least one dot-com survivor has shown it is still not ready to be voted off the New Economy island just yet.

Online recruitment service JobStreet.com, which serves jobseekers and job hunters from Malaysia, Singapore, India, the Philippines and other Pacific Rim countries, has secured 7.5 million ringgit ($1.97 million) in fresh funds from Japanese trading firm Sumitomo Corp. and venture capital companies BI Walden and Intelligent Capital.

The sum is modest by any standard, but investors pointed out getting any investment at all for a pure play dot-com these days lends credence to the company's business model.

"JobStreet.com is one of the few companies in the Internet sector that has proven its business model, with strong revenue and cash flow streams, unlike many of propositions we have seen in the same space," said Chok Kwee Bee, BI Walden executive director .

Other investors said that the company's "clear focus" and "deep and well-rounded" management should keep it in the game long after others have flopped.

JobStreet.com founder Mark Chang said the company's frugal approach to spending and an ability to scale its business steadily rather than rush to expand have been key factors. "We didn't try to be overly ambitious," Chang said. "Our current cash flow is sufficient for our operational needs. The new funds will be mainly to deepen our product portfolio in the human capital business."

JobStreet.com has largely funded its growth through a first round of venture capital of 6.2 million ringgit ($1.63 million) from Walden International in 1999 and internally generated funds.

In March 2000, JobStreet.com scored a coup when it sold its 5-year-old directory service Malaysia Online (MOL.com) for 12 million ringgit ($3.15 million) to local tycoon Vincent Tan. Chang and founding partners Charles Lim and Ng Kay Yip started Malaysia Online in 1995 with 200,000 ringgit ($53,000).

Chang said he is targeting JobStreet.com to double its revenue this year, from seven million ringgit ($1.84 million) in 2000. "We currently process over 500,000 applications a month for over 8,000 companies and have a resume bank of over 1.3 million users. In Malaysia, one of every four Internet users has used our service," he said.

JobStreet.com has expanded from a single office in Penang, Malaysia in 1995 to 120 staff in nine offices in India, Malaysia, Singapore and the Philippines.

Chang said the company has also recently completed a deal to enter the Chinese market and may leverage on its new strategic partner Sumitomo to expand its geographical footprint into Japan and other North Asian countries.

Chang believes the online recruitment industry in Asia is largely untapped and still poised for exponential growth. "The market is becoming more transparent, people are becoming more mobile, and tend to take shorter employment stints," he said. "Contract- and home-office employment is becoming popular and more companies need to speed up their recruitment processes and hire skilled workers faster." Chang estimates the industry in Asia to be worth $1.1 billion by 2003.

JobStreet.com uses a proprietary resume tracking and sorting system developed in-housed called SiVA, which customers can access via an application service provide (ASP) model. "One of our customers, Dell Asia Pacific, said that our system has reduced their turnaround time dramatically - from placing of the ad to hiring - to as little six days from the previous 60 days," he said. "Employers also save ad costs of between 3 and 20 percent compared to using the classifieds in newspapers and other traditional means."

Chang declined to put a fixed timeframe on an initial public offering, suggesting it was still very focused on scaling the business up. However, he hinted that the company was open towards discussions on any merger or acquisition with other e-recruitment players globally.

JobStreet.com has had various suitors in recent years, the most prominent of which was Rupert Murdoch's News Corp.

Reported by Newsbytes.com, http://www.newsbytes.com .

13:12 CST

(20010612/WIRES ONLINE, BUSINESS/)

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