German telco juggernaut Deutsche Telekom has earmarked half a billion euros for a new hybrid innovation fund dubbed Deutsche Telekom Capital Partners (DTCP) in an effort to "considerably expand the scope and volume of its investments in venture capital and technological innovation".
The new fund, which will make its debut in 'early 2015', will be one of the largest investment funds in Europe. The telco plans for DTCP to have a fund volume of 500 million euros for a 5-year period on top of the existing investments in T-Venture (which has been Deutsche Telekom's venture arm since 1998).
T-Venture will be closed to new investments, although Deutsche Telekom says its team will remain on board and continue to manage the existing portfolio of around 100 companies. T-Venture will also retain responsibility for follow-up investments within this portfolio.
Here's the strategy behind the new fund, in a nutshell:
"DTCP will support Deutsche Telekom’s strategy as an external innovation engine through investments in venture capital, with a special focus on Germany’s exciting and growing start-up scene. On top of that, DTCP will also expand its activities to include private equity investments in existing undertakings to foster operational cooperation between over-the-top companies and Deutsche Telekom."
In other words, expect investments in scrappy early-stage upstarts as well as growth capital injections into mature companies. And Europe specifically needs more of the latter so let's pray Deutsche Telekom plays its cards right.
More info on Gründerszene (in German).