Softbank Investment International (Strategic) plans to launch next month a US$200 million to US$300 million venture-capital fund which will invest in traditional mainland businesses it will help transform into Internet companies. Softbank International, the locally listed subsidiary of Japan-based Softbank, will take a 10 per cent stake in the fund and invite other companies to join. Through this 'Net-trans' initiative, Softbank International is looking to invest in traditional businesses with the potential to become more profitable by utilising the Internet. The fund will provide the initial capital, and Softbank International will supply the technological expertise to help the companies' off-line businesses move on-line. The initiative allows Softbank to tap the potential of the mainland's growing business- to-business e-commerce sector free of official restrictions. President Junichi Goto said Softbank International was considering more than 20 potential investments in the manufacturing, retailing and trading sectors. None were state-owned enterprises. The 'Net-trans' fund would provide first-round financing to the companies, and Softbank International would make direct equity investments later, Mr Goto said. The formula is modelled on the investment strategy Softbank adopted in the United States Internet sector. It tipped the risk-reward ratio in the Japanese company's favour. In the US, Softbank has set up separate venture funds to invest in Internet-related businesses at different levels of maturity. The closer to the start-up stage, the smaller Softbank's stake in the venture fund. It would often invest directly, through a subsidiary, in companies at the pre-initial public offering or post-listing stage. Mr Goto said Softbank International would only consider companies with strong management with the commitment and ability to improve and expand their business through utilising the Internet. 'It can't be our effort alone. Companies must have their own [in-house IT talent] . . . and we'll help them change,' said Mr Goto, pointing out Softbank International's technology team would provide planning and consultation. Chief technology officer Sujen Lu had arrived in Hong Kong and would recruit an initial seven to eight technology experts this month to form the core team. Web-enablement work would be out-sourced to local and mainland-based application service providers in which Softbank had an investment. Some of the work would be outsourced to Web Connection, the e-commerce consultancy and enablement arm of Chinadotcom, one of Softbank International's strategic partners in the mainland. Trend Micro, a Tokyo-based anti-virus firm in which Softbank has a minority stake, would provide the backbone and 24-hour support services to the companies' on-line operations. Trend Micro founder and chief executive, Steve Chang, would join Softbank International as a director. Before investments in the 'Net-trans' project were realised, the firm would be counting on the on-line financial services companies it sets up in Hong Kong to generate recurring cash flow. In the meantime, Softbank International was looking to build up its Chinese-language Internet content portfolio. They would eventually be tied-up with the relevant companies in Softbank's US and Japan portfolios to create synergies. 'In future, we will do tie-ups with these companies,' Mr Goto said, citing Yahoo! China and Yahoo! Hong Kong as candidates. Softbank International has leased 10,000 square feet of offices in Central and is in the process of recruiting an extra 30 to 40 staff.