A new Costa Mesa venture capital firm formed by Japanese businessman Toshihiro Hirosaki is targeting local technology companies with existing or potential ties to the Pacific Rim.
Hirosaki, chief executive of Ask Planning Center, a Japanese company with offices in Tokyo and Osaka, is bankrolling the venture, which is modeled along the lines of technology investor and holding company CMGI Inc.
Gary McKenzie, president and chief executive of International Technology Holdings Inc., declined to specify how much his new company has to invest.
“It’s a little ostentatious to say Hirosaki’s support is limitless, but there is no pre-planned funding limit,” he said.
McKenzie said International Technology is not marketing itself as a conventional venture capital firm,it doesn’t yet have a Web site, nor is McKenzie soliciting proposals.
“We’re not asking people to send their business plans to us,” he said.
Instead, the firm is looking to start, buy or invest in companies with potential to do business in Asia, he said.
“There’s always a toss-up between buying and building,” he said. “Invariably it’s easier to buy. It’s always preferred.”
International Technology aims to identify opportunities in Asia and look for or create companies to meet them. The firm has identified five companies it will be involved with over the next 12 months, McKenzie said.
“We know who they are,” he said. “And we will own at least a majority of each.”
International Technology plans to announce its second company in September, he said.
The firm’s first venture is iCoTech, Inc., a data center operator started from scratch by ITH and based at its Costa Mesa offices. The company plans to build and operate other data centers where companies lease space and contract out the management of their data operations. ICoTech plans to build, operate and service the data centers.
The centers, he said, will be in new buildings in “tier-two” cities. ICoTech’s first location is in 4,000 square feet of space in Orange on City Drive. The center cost $1.5 million to build, excluding the lease. McKenzie declined to name customers of the data center.
ICoTech has the option to expand in the same building but likely will take additional space in a new spot when needed, McKenzie said. International Technology also plans to build a data center in a new market by the first quarter of next year, he said.
The firm is looking at San Diego, Texas and Colorado for additional data center locations. Like its Orange data center, the firm hopes to find top-notch buildings in growing areas outside big cities.
“We would not place a data center in Denver,” McKenzie said. “We would put it between Denver and Colorado Springs or between Austin and Dallas.”
Larger cities already have their share of data centers, he said. Besides, a lot of new technology companies are growing in nearby smaller markets, he added.
International Technology is looking to hire a president for iCoTech, which in addition to its U.S. work also is hoping to build in Japan, where Hirosaki’s Ask Planning Center does corporate space planning.
“Hirosaki owns a substantial amount of real estate in Tokyo and Osaka,” McKenzie said.
McKenzie declined to comment on the data center operation’s sales, profitability and pricing. He said iCoTech’s prices are lower than the market leader, Exodus Communications Inc., which is based in Santa Clara and active locally.
“They are aggressively building in Orange County,” McKenzie said. “Our intention is not to go head-to-head with the leaders in the field.”
While iCoTech is courting some of the same large companies as Exodus, McKenzie said he expects much of his business to come from smaller businesses.
“We understand start-ups and cash flows so we price ourselves to be attractive to start-ups,and up,” he said.
McKenzie formerly managed and owned E-Com Holdings LLC in Newport Beach, an operation similar to International Technology but on a smaller scale. Before that, he was chief executive of Interplay Entertainment Corp. unit Engage Games Online, a now-defunct online game service.
Currently, McKenzie serves as chief executive of Costa Mesa-based InterGame Inc., which provides in-flight entertainment systems to airlines. Hirosaki is InterGame’s chairman. n
