HELSINGIN SANOMAT international

Business & Finance - Wednesday 2.5.2001

Valtonen denies Wapit bankruptcy

 Small net sales led to huge losses

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By Marko Junkkari

“We are confident in the future of the company”, assures Markku “Mato” Valtonen, the principal owner and PR manager of Wapit, which provides mobile services and technologies.
   
He is annoyed at the rumours that have circulated about the company’s bankruptcy as of late.
   
The rumours surfaced last week when the web site of Jippii Group revealed that Wapit had run out of cash, and the company had not succeeded in raising any additional funds. The story also claimed that Sonera Zed and a small Italian firm were interested in acquiring Wapit.
   
“The information is false. We are still very much alive and kicking”, Valtonen maintains. According to Valtonen, rumours of this type are unfortunate for the company’s customer relationships and staff.
   
“Luckily our employees are incredibly loyal, and the rumours have not affected the good working atmosphere”, Valtonen explains.

Wapit President Hannu Bergholm
also arrives and assures that Wapit is doing just fine.
   
“We are in the final stages of negotiations for our second round of financing. Our goal is to raise ten to fifteen million euros (FIM 59-89 million) from venture capitalists”, Bergholm explains. According to Bergholm, the company has negotiated for new funds since last autumn, but the difficult market situation has delayed the process.
   
The financial ratios prove that additional funds are needed, and fast. Bergholm says that the company produced losses of FIM 30 million last year, with net sales of 4.7 million. The number of personnel is over one hundred.
   
“Antti has given us some artificial respiration”, Valtonen explains how this asymmetric equation has been able to function.
   
“Antti” refers to the principal owner of electronics subcontractor Elcoteq, Antti Piippo, who owns a good third of Wapit through his investment company. Valtonen declines to elaborate on the exact amount of resuscitation Antti has provided.

Valtonen,
who has been a member of rock bands Sleepy Sleepers and Leningrad Cowboys for 25 years, founded Wapit in late 1998 together with Pekka Palin. Antti Piippo was a part of the team from the start, as an owner and Chairman of the Board.
   
Wapit received a vast amount of publicity, for it was one of the first mobile content providers in the world. Valtonen announced his visions on the mobile future in publications such as the Wall Street Journal and Financial Times. Time placed Wapit on its list of the fifty most promising European technology companies.
   
From among several eager venture capitalists, Wapit finally settled on British Durlacher a year ago in the winter. Durlacher acquired 6.7 percent of Wapit shares with FIM 12 million.
   
“We could have received even more money, but we wanted to keep a sufficient share of ownership to ourselves”, Valtonen maintains.

President Bergholm
emphasises that Wapit has concentrated on product development so far. “Now our products are finalised and in the pipeline.”
   
The Wapit product is a technological platform that is offered to mobile operators. SMS messaging and WAP services are built on the platform. This product has been sold to operators in the Philippines, Malaysia and Australia.
   
Bergholm estimates that Wapit net sales will total 40 million this year, and net income should be positive on a monthly basis.
   
“This goal is challenging”, he admits.

According to Mato Valtonen,
he does not regret the fact that he did not cash in on his shares when the mobile hype was at its hottest. “Or maybe it did cross my mind a few times, but then I realised that it is great to work on something new like this with this great team.”
   
“Besides, I do not even want to be rich, maybe only a little bit rich”, Valtonen claims.
   
“A sum like one hundred million would change your life too much. The kids would just wait for their old man to kick the bucket so that they could get their hands on their inheritance.”

Helsingin Sanomat / First published in print 27.4.2001

Links:
 Wapit home page


MARKO JUNKKARI / Helsingin Sanomat
marko.junkkari@sanoma.fi

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