Rowland back in dot.com game with social media flotation

Jonathan Rowland, the investor who made his name during the dot.com boom, is to return to the technology market with the launch of an investment vehicle targeting social media companies.

Over a decade ago, Mr Rowland's investments made him more than £40m at the age of just 25, and yesterday he announced the intention to float his new venture, Jellybook, on the Alternative Investment Market.

Jellybook – a reference to his earlier investment vehicle Jellyworks – will focus on digital media and social networking companies. This comes at a time of huge interest around investing in digital companies, especially those with social networking operations.

LinkedIn, the professional networking site, saw its shares double on their first day of trading in New York last month, and there has been huge interest in discount site Groupon, which has filed its IPO papers. The market also anticipates a similar move from Zynga and Facebook. Jellybook will be targeting companies this side of the Atlantic.

Mr Rowland, the son of property tycoon and former Tory party treasurer David "Spotty" Rowland, said: "The rise of social media in the past five years has been a development of global proportions," before adding: "Yet until now public market investors have had limited opportunities to invest in this fast-growing sector. We believe that Jellybook will provide them with that opportunity in the UK."

In the drive to make Jellybook "a leading European social media company", Mr Rowland has called in some heavy hitters in the industry to bolster its credentials. These include Julie Meyer, who set up Ariadne Capital in 2000 and was behind networking forum First Tuesday. Michael Wright and Walter de Brouwer join her on the board.

The company will list on London's growth market as a cash shell and aims to make one big acquisition or investment within its first 18 months on the public markets.

The company did not want to provide further details on the potential targets before it starts trading in two weeks. The directors hope to raise a minimum of £3m from the float, which is being underwritten by the Rowland's Luxembourg-based family bank, Banque Havilland.

Mr Rowland made his name in 1999, when he founded Jellyworks, a venture backed by the Barclay Brothers, and floated it at 5p per share. He was an early investor in companies including Demon Internet and 365.com

The shares in his investment vehicle soared 2,000 per cent in just three days as the clamour for dot.com investments reached fever pitch.

Yet, the euphoria waned somewhat the following year and the shares retreated. He sold to Shore Capital in 2000, shortly before the dot.com bubble burst, and still made £42m from the deal. That was not his last venture into technology investment. He floated the Nettworx cash shell on Aim in 2005, which was also set up to target telecoms deals, and which he had dubbed at the time "Jellyworks Mark 2". Its backers included the billionaire Joe Lewis and Brent Hoberman, co-founder of Lastminute.com. It was liquidated in 2009.

Mr Rowland pointed to statistics from April last year that showed more than 110 billion minutes were spent on social networks and blogs, a fifth of all time spent online, and the numbers have soared since then.

Yet despite the strong growth, businesses in the social media sector have struggled to raise capital in the wake of the downturn.

The group said it would not be focusing specifically on any particular place, although given the board's expertise in Europe, they will be "well positioned to consolidate opportunities in Europe".

Mr Rowland added: "We believe that the investment case for Jellybook is clear and is backed by an unprecedented interest in social media, from investors to end users. Social media is helping redefine global business and the way in which people go about their daily lives."

He said the company was closely following the listings of LinkedIn and the Chinese social network Renren. It will also await Groupon's flotation after expressing its interest to float.

Mr Rowland has been chief executive of Banque Havilland for the past year. The Rowland family established the bank by picking up some Luxembourg assets from the rubble of the collapsed Icelandic group Kaupthing in July 2009.

The operation has been the focus of interest from both the Luxembourg police, and the Serious Fraud Office, although the company stressed that these visits related to operations that were taking place before the current management had become involved.