Divergent continues to seek out high growth private opportunities.

Divergent Capital Partners is a venture capital fund manager focused on innovative, high growth companies in the Information Technology sector.

Established 8 years ago we have invested $7M in seed capital across more than a dozen emerging technology ventures. Last year Divergent portfolio company Visean Information Services was sold to a billion dollar multinational delivering Divergent, our shareholders and co-investors a very healthy return.

Since then we have had a number of enquiries regarding opportunities to co-invest with Divergent in our portfolio companies or into our fund. Particularly given the extreme volatility recently exhibited by the stock market, many investors are looking for opportunities to allocate capital into alternative asset classes such as Venture Capital that are largely uncorrelated with the listed sector.

This newsletter contains information on a selection of companies in our portfolio that are currently offering attractive co-investment opportunities.

Disclaimer: Please note that this newsletter should not be taken as recommending that you take up any of the mentioned opportunities. You should undertake your own due diligence and obtain independent financial advice from a person who is licensed by ASIC to give such advice, before making a decision as to whether or not to take up any of the opportunities mentioned in this newsletter.

Fancy a club soda?

What happens if you combine BattleShips with Pool? You get Battle Pool! Each time you sink a ball it appears on your opponents table. Each time your opponent pots a ball it appears on yours! Check it out on www.fizzy.com!

3rd Sense is the leading casual game business in Australia. The business is
5 years old, employs 14 people, and has invested significantly in developing assets including web properties, marketing devices, and the games themselves. In addition the founder and CEO Colin Cardwell is a recognised expert in the space, having presented at the worlds first casual games conference amongst other engagements. 3rd Sense now plans to bring all of this together as they embark on building a next generation casual games distribution platform www.fizzy.com. While Fizzy will soon cater to games developers all over the world it is currently in an alpha phase selling only 3rd Sense games. While 3rd Sense could develop the further phases of Fizzy out of operating cashflow they would like to go to market as soon as possible and hence are looking to raise a bit of extra cash with which to speed up this process.

You could do it without a brain ...

PCT Filer offers an online service to lodge a patent application in dozens of countries around the world at a fraction of the price typically charged by traditional patent attorneys. Like the advent of online share trading 10 years ago (and look at Comsec now), it’s one of those “why did nobody think of that before” type business ideas. With such a compelling value proposition to customers it won’t come as any surprise that PCTFILER has more than doubled in size for the last five years to now rank among the largest filers of international patents in the world!

With offices in Sydney, New York and London the company is now seeking expansion capital to ramp up the sales and marketing of its services to large corporate users through increased direct sales resources and the establishment of key strategic distribution partnerships.

The company is likely to seek a liquidity event for shareholders via a listing or trade sale in two to three years’ time.

Emotional Intelligence (or EI) is acknowledged as a key ingredient in identifying and developing great leaders and teams...Genos is an Australian company leading the world in enabling companies to leverage this concept through its online EI test.

Over the past decade, Emotional Intelligence has been established as a recognised concept in HR with benefits for companies across the employee lifecycle (recruitment, development, transition). But until now there had been a lack of robust, easy-to-use products to enable organisations to leverage this concept...that is where Genos stepped in.

Building on four years of research and now a further five years of commercial use in the field, the Genos EI test is acknowledged as a global leader in applying the EI concept to the workplace. Genos, through their unique online testing platform, have administered many thousands of EI tests for individuals, teams and organisations in Australia and around the world.

With a network of over 500 accredited consultants and annualised revenues in excess of a million dollars, the company is now poised for rapid and profitable growth through its portfolio of industry leading IP. Expansion capital is sought to drive this growth phase and in particular export opportunities in key global markets.

E-commerce is growing rapidly and is now worth billions here in Australia and around the world...HotShed is well positioned to ride this wave and benefit from increasing industry consolidation

The range of products and services that are now transacted online is virtually without limit and the convenience, accessibility and security associated with e-commerce make it ubiquitous. The Australian economy follows this trend, albeit behind markets like the US, but without the major players that are found elsewhere (Amazon, eBay, etc).


In this context of a highly fragmented but large and fast growing Australian market, Divergent portfolio company and e-commerce leader HotShed is seeking to drive a much needed industry consolidation to create a sustainable, profitable and scalable
e-commerce company to replicate the success stories from other key IT sectors (Seek – jobs, REalestate.com.au – property, Carsales – cars, RSVP – dating).

HotShed is seeking capital to fund initial acquisitions and the costs likely to be incurred in the run-up to a proposed IPO in 2008.

Finally, we also wish to take this opportunity to farewell a Divergent colleague who is moving onto greener pastures.

Daniel Abbott, our Investment Associate, will be finishing up with Divergent in mid September to take up an exciting role with the Mergers
& Acquisitions team at LendLease Corporation. Although sad to see him go, we are thrilled that Dan has an opportunity to embark on the next stage of his career with a top tier Australian company.

On behalf of not only Ryan and David but the extended Divergent network, we would like to thank him for his dedication, good spirit and contribution over two and a half years and wish him every success in the future.

Phone: +61 2 8297 4400
Fax: +61 2 9290 2766
Email: info@divergent.com.au
Web: www.divergent.com.au

©Divergent Capital Partners 2007. All Rights Reserved.

We welcome your feedback on our newsletter. Please e-mail us your comments, suggestions or entrepreneurial opportunities!

Do we have your correct details? If you do not wish to receive this service, or would like to view or modify your personal details, please e-mail us or phone +61 2 8297 4400 requesting your change