Cisco, 3TS launch East European venture fund

Cisco Systems is stretching its venture network into Eastern Europe. Last week, the San Jose, Calif.-based networking giant announced that it has launched a new technology fund in partnership with Eastern European private equity firm 3TS Capital Partners.

Called 3TS-Cisco Growth Fund III, the fund will make investments across Central and Eastern Europe, focusing on technology, media and communications. In addition to the core countries of Estonia, Latvia, Lithuania, Poland, Czech Republic, Slovakia, Austria, Hungary, Slovenia, Romania and Bulgaria, the fund will consider investment opportunities in Croatia, Serbia, Ukraine and Turkey.

The fund will target high-growth companies, small and medium size enterprises which are or are perceived to have potential to become either regional market leaders or global players.

The new fund brings to more than $293 million the funds under management at 3TS, which has offices in Budapest, Bucharest, Prague, Vienna and Warsaw. Investors in the funds include Cisco, 3i, EBRD, KfW and Sitra, among others.

Cisco corporate business development director Hilton Romanski told PE Week in March that the company was looking to expand its venture activities in Central and Eastern Europe. At the time, Romanski said that Cisco would invest about $130 million in the region.Driving Cisco’s interest in Eastern Europe is a skilled technology workforce, fast-growing economies and flourishing stock exchanges. “These are markets where IT is being implemented and adopted at a rapid pace,” Romananski said.Cisco is not the only investor in the region. Draper Fisher Jurvetson recently closed a $150 million fund decicated to investments in Russia. And European-based Mangrove and Index Ventures are aggressively pursuing deals in the area.