Citibank will take a stake in C1ME, the regional provider of online trading exchanges for businesses and organisations. The exact shareholding and the value of the investments will be confirmed only after C1ME completes its second round of financing in the next few weeks, according to a senior Citibank official. But the final shareholding should be in single digits, he added.

Citibank, which has a global alliance with Commerce One Inc, will also provide payment gateway services to the venture in the region. Through this round, C1ME expects to raise its paid-up capital base to $30 million. An additional 4.2 million shares have been issued.

Primary investors in the company include Commerce One Inc in the U.S. and Kuwaiti investment bank, The International Investor. It had raised $10.7 million in the first round early last year.

"Against the issued lot of 4.2 million shares, the markets were demanding about 15 million. The subscription documents have already been sent and we expect to wrap up the process in the next two weeks," said David Brown, chief executive of C1ME. "Our board has mutually agreed to bring in new investors which is why the original shareholders have waived preemptory rights during this round."

Commerce One Inc holds 5 per cent in C1ME now. The latter went live with its Qatar e-marketplace on Monday, following the launch of its Kuwaiti exchange in December. Telecommunications provider Q-Tel has a stake in the Qatari venture.

As per current plans, the UAE marketplace should be ready in six weeks. In all, the company plans to have 14 online exchanges in the Middle East. "One of the critical success factors for B2B exchanges is an integrated logistics and financial services payment gateway that moves value from one end of the supply chain to the other," said Shankar Krishnan, Citibank's vice-president and regional e-business head.

"The Middle East continues to suffer from lack of user-friendly B2B payment gateways." This is Citibank's second major investment in a regional Internet venture. Along with Aramex, the Jordan-headquartered air express company, Citibank has a stake in Aregon.com, a Dubai Internet City based portal for small and mid-sized businesses.