Deutsche Telekom Launches New Venture Fund Focused on German Startups

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Germany’s Deutsche Telekom will launch a new venture fund, called Deutsche Telekom Capital Partners (DTCP), in early 2015, according to an announcement by the telco on Tuesday. The fund will focus on Germany’s startup scene, and is valued at more than $624 million US (around €500 million) over five years.

DTCP’s investments will be in addition to those of T-Venture, a venture capital fund it established in 1998, which will now be closed to new investments. The T-Venture team will remain on board and continue to manage the existing portfolio of around 100 companies, Deutsche Telekom said, but all new investments will be executed through DTCP.

DTCP will advise Deutsche Telekom on existing investments in STRATO, Interactive Media, Scout, Deutsche Telekom Innovation Pool and T-Venture.

“DTCP combines the expertise and strength of a large corporation with the agility and flexibility of a small investment company: the best of both worlds to take Deutsche Telekom forward,” Deutsche Telekom CEO Tim Höttges said.

“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,” Thorsten Langheim, Senior Vice President, Group Corporate Development, who will be responsible for DTCP at Deutsche Telekom said. 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,” emphasized Thorsten Langheim, Senior Vice President, Group Corporate Development, who will be responsible for DTCP at Deutsche Telekom.

In March, Deutsche Telekom partnered with CipherCloud to provide encrypted data transfer and storage in cloud servers. T-Venture was part of CipherCloud’s $30 million funding round in December 2012.

As Germany makes a name for itself by imposing stricter privacy rules and protections for its netizens than North America, there may be many opportunities for venture capitalists to invest in companies that offer security and privacy solutions. Also, as Germans are known to prefer to work with service providers on their native soil, the same could be true about German companies prioritizing investments from German VCs, which could mean good things for DTCP.

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