French Tech Seed Fund has Some $40M to Invest

French venture capital firm Innovacom has announced the closing of Technocom 2, a seed fund focused on start-ups from French public, academic and industrial research in digital technology, IT and telecoms sectors.

Technocom 2 is being managed by Innovacom and was launched by the Fonds National d’Amorçage (FNA) alongside major French industrial partners Alcatel-Lucent, Orange, Groupe SEB and Soitec.

FNA, managed by CDC Entreprises, an affiliate of Caisse de Dépôts, is a fund-of-funds set up by the French government to provide equity financing for technology seed and start-up businesses.

The close was announced following FNA’s second commitment of 18.7 million ($24.5 million) euros to the fund alongside Alcatel-Lucent, Orange, Groupe SEB and Soitec.

In total, Technocom 2 will have more than 30 million euros to invest. The fund will focus on five sectors in technology: materials and components, embedded software systems, machine to machine and machine to user communication, data management and high-speed broadband connectivity. The team plans to finance and monitor around 15 start-ups with strong growth potential.

Technocom 2’s strategic committee includes representatives from each of its partners, including CDC Entreprises on behalf of the FNA, the research department of Sorbonne Paris Cité, as well as the director of telecom ParisTech. The committee will help Innovacom assess projects and provide industrial mentoring to the portfolio companies.

Fund manager Innovacom has already reached agreements with several competitive clusters and incubators focusing on technologies relevant to the fund’s focus.

Denis Champenois, Innovacom chairman said about the fund: “It’s time for open innovation with the emergence of the smart Grid, e-Health, smart Transportation, Home automation. By assembling complementary world industry leaders, Technocom 2 will be a tremendous platform for an open innovation energized by entrepreneurs.”

Technocom, the predecessor seed fund raised 15 million euros in 1998. This fund was dedicated to technology spin-offs from France Telecom R&D, made nine investments and generated a financial return of 2.3X.

FNA has allocated 400 million euros in government funds to seed and early stage French funds as part of its Investment Programme for the Future (PIA) which is managed by CDC Entreprises. It does not invest directly in companies but is committing to 15 to 20 seed funds in France. The scheme was approved by the European Commission on 20 April 2011.

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