French telecom will join up with Publicis Groupe and Iris Capital Management to invest in digital economy start-ups
Following last week's announcement of new start-up investment from O2, another mobile provider has jumped on the bandwagon. France Télécom-Orange has announced it will team up with Publicis Groupe and Iris Capital Management to form a European-centric investment fund aimed at the digital economy.
The new group, called OP Ventures, will be backed by a fund exceeding €300m; €150m of that will be provided by Orange and Publicis Groupe, a French advertising company. The rest of the cash will come from Iris' existing commitments from investors, including European Investment Fund and CDC Entreprises.
The investment fund will be made up of three groups: OP Ventures Growth, which will target companies across Europe that are already well established, providing investments of up to €15m; OP Ventures Global, which will look for start-up investments of up to €15m worldwide; and OP Ventures Early Stage, which aims to provide seed-capital and early-stage investment of up to €3m across Europe.
The first two groups are ready to go now while the final division, OP Ventures Early Stage, will open its doors during the second quarter of 2012.
Investments will focus on what the group calls the digital economy. It is likely that investments will be along similar lines to Iris' existing portfolio, which includes companies such as Berlin-based search-engine optimisation company Searchmetrics and Clear2Pay, a Belgian company specialising in payment technology services.
"There are a lot of smart engineers and entrepreneurs in France and in Europe who are involved in projects that are innovative and exciting, and our plan is to get funds flowing to their businesses as fast as possible so they can flourish," said Maurice Lévy, chairman and CEO of Publicis Groupe.
"This joint initiative with Publicis Groupe and Iris is a pioneer in its field. It complements Orange's considerable effort in terms of research and development, and it will encourage the emergence of future leaders of the digital economy by bringing them funds at several stages of their development," added Stéphane Richard, chairman and CEO of France Telecom-Orange.
The deal effectively means that Orange and Publicis Groupe will each acquire a minority 24.5% interest in Iris Capital Management. Iris' management will retain a controlling interest. Irish is based in Paris and is said to have invested €870m in over 200 companies since its launch in 1986.
Just last week rival mobile operator O2 announced it was brining its Wayra start-up incubator to the UK market, providing start-ups with the chance to win investment as well as technical expertise.