France Telecom’s venture capital subsidiary, Innovacom, has raised its fourth investment fund. Having surpassed its original target of EURO150 million at a EURO170 million July first closing, Innovacom 4 last month held a final closing on EURO200 million. France Telecom provided 15 per cent of the total, with the balance raised from third-party sources. In addition to existing investors in previous funds, three new investors have joined the LP line-up in the latest fund Singapore GEDC, Vontobel of Switzerland and AXA Private Equity.
The new fund is five times the size of the 1998-vintage Innovacom 3, and will be managed by Innovacom-Gestion, a newly created entity that has been approved by the COB, the French stock market watchdog. An investment priority for Innovacom 4 will be start-ups in wireless Internet products and services from outside the France telecom group. The fund will also be making spin-offs from telecom R&D labs a major component of its investment portfolio.
Denis Champenois, head of Innovacom, underlines the three main priorities of the fund. He says the fund will concentrate on mobile Internet ventures; investments in high-speed networks, focusing on optical technologies and new materials for high-speed transmission; and e-business ventures that offer software and services to help large corporations to develop their e-business portfolio. Since its first closing in July, Innovacom 4 has already invested in six companies in the fields of application software, mobile Internet, optical and has enjoyed significant success in its venturing activities in the past. French companies backed by Innovacom 2 that have had successful exits include Silicon-On-Insulator Technologies (SOITEC), which floated on the Nouveau Marche in February last year; a commercial spin-off of the Laboratoire d’Electronique de Technologie et d’Instrumentation (LETI), a French technology and instrumentation laboratory for semiconductor research; and Integra, a provider of integrated e-commerce and Internet solutions, which was also floated on the Nouveau Marche. Infovista, which focuses on the field of network management, held a Nasdaq IPO this July.
Innovacom also invests in online services and e-business ventures and holds stakes in, among others, Au Feminin.com, lastminute.com, ChateauOnline.com, ww.TradeMatch.com, kelkoo.com, Siria Technologies and Linux @Business.
Since 1998, Innovacom has arranged Ff500 million in funding (either directly or by bringing in other investors) for the first seven France Telecom group spin-offs financed by venture capital: Algety, High Deal, High Wave, Mob’Activ, NetCentrex, Wok Up and Atchik. Since January 2000, Innovacom funds have completed divestments totalling Ff423 million with capital gains of Ff398 million.