France Télécom-Orange and Publicis Groupe plan to launch a new venture capital fund that will finance and develop budding entrepreneurs in the digital economy, particularly in France and the European Union, building on the sector’s potential for spectacular creativity and growth. It remains subject to the approval of the relevant authorities.
France Télécom-Orange and Publicis Groupe are committed to jointly investing 150 million euros in the new fund. In addition to their respective commitments, the two sponsors intend to invite other investors to join them, to reach a target of EUR300 million.
The fund’s main targets for investment will be companies focusing on digital technology, content and services. Likely sectors include online marketing, e-commerce, mobile content and services, online gaming and social networks, as well as their associated technologies and infrastructures such as middleware, cloud computing, security, and online payments.
The fund’s investments will be divided into three distinct categories. Seed-capital and early-stage investment will target fledgling companies in France and Europe, with investments of up to one million euros. Later-stage financing for more established companies in France and Europe will provide up to 15 million euros per project. Thirdly, at a later time the fund may also opt to invest in start-ups outside Europe, alongside American or Asian partner funds.
The new fund will be operated by a management company, with investment decisions made by an Investment Committee independent of both France Télécom-Orange and Publicis Groupe. Details of the fund’s operation and governance will be released at a later date.
"French investment capital has been suffering for far too long from the absence of a solid ecosystem to link young companies together with larger groups, research centres and government systems," says Stéphane Richard (pictured), chairman and chief executive officer of France Telecom – Orange. "We’re very happy to be working with Publicis Groupe to finance and says digital start-up projects. This is a surging growth market and it’s an important challenge: our job will be to contribute to the emergence of tomorrow’s leaders. From the point of view of FranceTélécom-Orange, the new fund complements our investments in R&D, as well as creating a terrific opportunity to be present at the birth of growth projects."
Maurice Lévy, chief executive officer of Publicis, says: "All over Europe, there are young companies with powerful, game-changing ideas, and they’re not getting the financial backing they deserve. The need for a major, dedicated venture capital fund became obvious while Jean-Pierre Jouyet and I were writing our report on the intangible economy in November 2006, and it became even more clear during the e-G8 Forum on the digital economy that took place in Paris in May. I’m delighted that France Télécom-Orange and Publicis Groupe have been able to launch this fund to help budding companies blossom and create value in the digital economy, which has such huge potential for innovation and growth.We feel that this project is in the national and European interest, and I hope that we’ll be swiftly joined by other institutions and funds so that we can operate on an even more massive scale."
