France Telecom (FT) Orange and the advertising agency giant Publicis committed to creating a venture capital fund of up to €300 million in digital start-ups. The two companies will invest €150 million and are also looking for outside investors.
The as yet unnamed joint venture will look to invest between €500,000 and €1 million in early-stage European companies operating in e-commerce, online gaming, social networks, and the mobile content and services sectors. The JV funds will be operated by a management company, independent of both Orange and Publicis Groupe, and will also fund more established digital companies with investments up to €15 million.
According to Reuters, FT Orange and Publicis formed the JV to address the funding needs of European start-ups and bridge the gap between these embryonic firms and much larger companies. "Investing in start-ups is not something that should be done only by business angels; we also have a responsibility," FT Orange CEO Stephane Richard told Reuters. He added that the investment fund would complement FT Orange's existing investment in research and development.
Publicis CEO Maurice Levy said at a joint press conference: "We want to participate more actively in the digital economy, and we also hope to benefit financially."
The European Private Equity and Venture Capital Association recently stated that France was already proving popular with entrepreneurs having attracted more venture or seed capital in 2009 and 2010 than those in Germany or the UK.
The formation of this French-based JV follows a move announced some weeks ago by Matthew Key, now head of Telefónica Digital, that this newly formed business unit would look to fund projects if it was considered to be mutually beneficial.
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