France Telecom-Orange (Paris, France) and Publicis Groupe (Paris, France), an advertising and communications company, announced on Monday plans to launch a new venture capital fund. The fund will finance and develop digital start-up, particularly in France and the European Union, says Orange. It remains subject to the approval of the relevant authorities.
Orange and Publicis Groupe will jointly invest $204 million in the new fund. According to Orange, the companies are interested in inviting other investors to join them, to reach a target of $408 million.
Both company’s main targets for investment will be companies focusing on digital technology, content and services. Likely sectors include online marketing, e-commerce, mobile content and services, online gaming, social networks, as well as their associated technologies and infrastructures such as middleware, cloud computing, security, and online payments, according to Orange.
The fund's investments will be divided into three distinct categories, says Orange. Seed-capital and early-stage investment will target fledgling companies in France and Europe, with investments of up to $1.4 million. Later-stage financing for more established companies in France and Europe will provide up to $20 million per project. Thirdly, at a later time the fund may also opt to invest in start-ups outside Europe, alongside American or Asian partner funds.
The new fund will be operated by a management company, with investment decisions made by an Investment Committee independent of both Orange and Publicis Groupe. Details of the fund's operation and governance will be released at a later date, says Orange.
"French investment capital has been suffering for far too long from the absence of a solid ecosystem to link young companies together with larger groups, research centers and government systems," says Stéphane Richard, CEO of Orange. "This is a surging growth market and it's an important challenge.”