New France Tlcom Fund Eyes Digital Economy

France Télécom-Orange and French communications group Publicis Groupe are launching a new venture fund targeting entrepreneurs in the digital economy in France and the European Union.

France Télécom-Orange and Publicis Groupe will jointly invest €150 million ($206.4 million) in the fund, which is unnamed as yet, and they hope to attract other investors to join the fundraising with an aim of reaching a target of €300 million ($412.8 million).

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.

The main focus of investment will be digital technology, content and services. Investment areas might include online marketing, ecommerce, mobile content and services, online gaming and social networks, as well as associated technologies and infrastructures, such as middleware, cloud computing, security and online payments.

The fund’s investments will be focused on three categories. Seed capital and early stage investments of up to €1 million ($1.37 million) will target fledgling companies in France and Europe. Later stage financing for more established companies in France and Europe will provide up to €15 million ($20.6 million) per project.

The fund may also have the option in the future of investing in startups outside Europe, alongside American or Asian partner funds.

France Telecom-Orange is a global telecommunications operator with 170,000 employees worldwide, including 102,000 employees in France, and sales of €33.8 billion ($46.5 billion) in the first nine months of 2011. Present in 35 countries, the company had a customer base of 221 million customers, as of Sept. 30, including 145 million customers under the Orange name, the group’s single brand for Internet, television and mobile services.

Publicis Groupe operates as a global communications group offering a range of services in digital and traditional advertising, public affairs and events, media buying and specialized communication. Present in 104 countries, the group employs 50,000 professionals.

Angela Sormani is based in London and can be reached at angela.somrani@thomsonreuters.com.