Waller targets communications industry

FRESH from nailing a cornerstone US shareholder, online financial products comparison group iSelect is getting ready to roll out into broadband, telephone and utilities services.

Chief executive and co-founder Damien Waller said the group launched a home loans comparison arm just over a week ago and has also moved into travel insurance.

The web-based group gives consumers the chance to work out the most suitable insurance option. It makes its money by acting as a broker to insurance providers, who pay to be partners and take part in the comparative process using iSelect's patented algorithm.

The $30.2 million acquisition of a 10.2 per cent stake in iSelect this week by US group Spectrum Equity Investors not only valued the company at more than $300 million, it gave Mr Waller an investment worth somewhere between $30 and $50 million on paper.

The sale was a milestone for Mr Waller who surrendered a fast track in stockbroking and investment banking - he worked at Goldman Sachs JBWere in the late 1990s - after being ''bitten'' by the internet bug before the tech boom.

Last financial year, iSelect's sales revenue grew almost 60 per cent to more than $43 million, with most new sales growth coming from its entry into life and general insurance advice. Almost half of its revenue was from trailing commissions - recurrent revenue paid by insuring companies to intermediaries such as iSelect for giving them an additional marketing arm. Mr Waller wouldn't say whether the group is growing at the same rate this year, but said the company was comfortable with its performance - as investors must be.

''Spectrum came and knocked on our door late last year,'' said Mr Waller, adding that the US group had been in Australia looking at potential investments. He is coy on his precise holding, saying only that he has more than Spectrum and less than ninemsn's foundation 35 per cent. According to last year's iSelect annual report, Mr Waller held almost 1.5 million shares in the company, which represents a little more than 10 per cent. In July last year, almost 1 million options in the company were exercised at $1.66 a share - and Mr Waller was the only significant option holder.

In August and October last year brokers EL & C Baillieu helped place more than 1 million iSelect shares with clients at $15.50 each. At the same time, long-term backers of iSelect sold $10 million worth of stock. Baillieu also handled the purchase of shares for Spectrum, at about $20 each, and Mr Waller said ninemsn did not reduce its stake in the deal. It is believed some longer-term investors, and staff, sold some stock. Although iSelect converted to public-company status last year, Mr Waller said that was no indication of plans for an initial public offering, but a technical restructuring necessary to complete the share offer by Baillieu.

Under corporate law a proprietary company cannot have more than 50 investors. Mr Waller said he wanted to complete plans for offering consumers broadband plan comparisons, and gas and electricity offerings, before considering an IPO. Once those arms are under way, iSelect is considering looking at contract comparisons for mobile phones.