HAARLEM, The Netherlands – Merging their disparate strengths to secure common strategic interests, telecommunications giant KPN Royal Dutch Telecom and Netherlands-based publisher VNU NV became the most recent corporate giants to announce a venture fund.
Although the shared private equity investment vehicle currently exists only as a letter of intent and no definite agreement between KPN and VNU has been finalized, the trickle of business plans into both corporate headquarters has already begun.
“It’s difficult to predict when any investments might come, but we’ve had many companies calling for information and, of course, for equity,” VNU Spokesman Maarten Schikker said.
When the $30 million KPN-VNU Convergence Fund begins operations in October, as expected, it will be an early-stage player, pumping $200,000 to $2 million of equity capital into companies whose business plans blur the lines between the telecommunications, information technology and media sectors. More specifically, the fund will seek out European-based content plays, end-user applications and wireless application technologies.
“In the New Economy sector and areas, we often look for interesting partners, not only to spread risk, but to provide us with expertise and know-how we do not possess,” Schikker said.
By taking relatively small equity stakes in its portfolio companies, the fund’s mandate places its corporate parents’ strategic interests far ahead of expected financial returns.
“We are not really a venture capital firm. It’s a modest size compared to real venture firms, but enough to do interesting investments,” Schikker said. “VNU wants early access to cutting-edge technologies and entrepreneurs, to get a feeling in the technology sector. For KPN, it’s an opportunity to build expertise in other areas, like content.”
VNU currently has Internet-related partnerships with a Dutch recruitment firm and other Internet portals and technology players.