Deutsche Telekom doubles down on venture capital with €500m fund

The German incumbent's new fund will feature a "special focus” on the country's startup scene.

German telco Detusche Telekom this week announced it will launch a new venture fund called Deutsche Telekom Capital Partners (DTCP).

The new fund, which is valued at €500m over five years, doubles the amount the telco currently invests through its other funds, including T-Venture. While T-Venture will retain responsibility for follow-up investments in its existing portfolio, it will offer no new funding.

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The T-Venture fund, which launched in 1998, has typically invested in a relatively narrow range of companies, from telco-oriented startups like Actelis to digital security offerings like CipherCloud. T-Venture has also been involved in some 30 exits, including high-profile ones like 6Wunderkinder and Groupon.

The new DTCP fund promises to "expand the scope and volume" of Deutsche Telekom's investments, according to a statement from the company. The fund will now also pursue "private equity investments in existing undertakings to foster operational cooperation between over-the-top companies and Deutsche Telekom".

Additionally, the fund will feature a "special focus" on the startup scene in Germany, according to Deutsche Telekom.

"I'm excited about the job of unifying Deutsche Telekom's innovation investments in one place, and being able to attract world-class talent to Germany to create a truly unique innovation engine," Vicente Vento, the CEO-designate of the new fund, said.

DTCP is set to launch in early 2015.

Telekom's increased engagement in venture capital comes at an active time for investments in Europe, where VC investments have often been seen as less profitable than elsewhere. In 2013, some €4bn of venture capital money was put into European startups, a small increase over 2012. However, North American VC firms have been stepping in for an increasingly larger slice of the pie: around 13 percent of 2013 VC money in Europe was supplied from North American firms, compared to 4.8 percent in 2012, according to statistics from the European Private Equity and Venture Capital Association.

Big corporate players are increasingly getting involved in the startup scene on the continent: earlier this year, Google's venture arm launched a $100m fund for European startups .

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