New Deutsche Telekom €500m fund could invest in OTT companies

Deutsche Telekom is to set up what it says will be one of the largest investment funds in Europe, doubling its earlier commitment to fund new innovative ventures.

In addition to providing venture capital for startups, as it has done previously through T-Venture, Deutsche Telekom’s new investment unit will also provide private equity funding for existing OTT companies, the telecom giant said.

Telekom is to set up a specialist team of investment managers in a new company, Deutsche Telekom Capital Partners (DTCP). The unit will have a fund volume of €500 million over five years on top of Telekom’s existing investments in T-Venture, its established investment fund.

In addition to investing in new ventures, DTCP will advise Deutsche Telekom on existing investments in Strato, Interactive Media, Scout, Deutsche Telekom Innovation Pool (TIP) and T-Venture.

T-Venture, which was launched in 1998, will be closed to new investments but its team will remain on board to manage its existing investment portfolio of about 100 companies.

In addition to providing venture capital to German startups, DTCP will expand its activities to include private equity investments in existing undertakings “to foster operational cooperation between over-the-top companies and Deutsche Telekom”, the company said.

DTCP will be led by Vincente Vento, currently senior vice-president of mergers and acquisitions at Deutsche Telekom, as CEO. The company will launch early next year.

“As a hybrid fund, DTCP combines the strengths of a large corporate group with the speed and expertise of an investment fund, and expands Deutsche Telekom’s spectrum considerably,” said Thorsten Langheim, senior vice-president, group corporate development, who will be responsible for DTCP at Deutsche Telekom.

“We are opening up new opportunities for ourselves to increase the value of our own investments that are not part of our core business in the long term. And our private equity approach will allow us to invest in more mature companies that have to date been outside the reach of a purely venture capital focus.”