In 1998 we invested $4.6m expansion capital in Elender, a Hungarian internet service provider (ISP) and at the time the third largest ISP in the market.
Originally focused on hardware retail, wholesale and PC assembly, Elender had been quick to identify the opportunity in the immature but burgeoning Hungarian internet market. Launched in 1996, Elender's internet service proved so successful that it quickly became the sole focus of the company's operations. In 1998 the market rapidly consolidated around three major providers - Elender, Matav (the local Hungarian PTT) and Datanet. We decided to support the only independent player - Elender - in growing its market share through the acquisition of regional ISPs, and through a heavy emphasis on quality of service and customer relations. The company also recognised the competitive advantage to be gained by offering value added internet related services. There was little domestic expertise available outside Elender to service the growing appetite for activities such as multimedia, databases, interactivity and dynamic applications.
By 1999, the business had made several acquisitions, including the Hungarian franchise partner of US multinational Compuserve. It had also built a subscriber base of 20,000 customers, secured a high-profile contract to provide internet services to 1,250 schools through a government sponsored programme and become the second largest ISP in the market and developed a well-known brand. A highly attractive strategic asset, Elender was acquired in September 1999 by PSInet Europe.