MADRID, Sept 4 Spanish telecoms firm Telefonica
said it would invest 68 million euros ($86 million) in
venture capital funds in a move to grow its digital division and
distance itself from the struggling economy of its home country.
Telefonica, which already supports start-ups through an
international network of 12 hubs, said it would launch the funds
initially in Spain, Chile, Brazil, Colombia and Chile, where it
has received funding from governments and institutions.
The network of funds, collectively named Amerigo, will
manage projects worth a total of around 1 billion euros and is
promoted by Telefonica Digital, based in London.
The firm said in July it expected revenues at Telefonica
Digital to rise by 20 percent a year to reach 5 billion euros by
"We have long understood that to succeed we need to
understand ... the digital innovation ecosystem, recognising
that great ideas can come from anywhere," Matthew Key, chairman
and chief executive of Telefonica digital said in a statement.
The company hopes to win some of the market dominated by the
likes of Facebook and Google through its digital
unit, which provides services including mobile advertising and
online payment systems.
The former monopoly, struggling with a dismal home market
and which suspended its dividend payments this year for the
first time since the Spanish civil war 70 years ago, is also
keen to loosen its link to the Spanish state and avoid the risk
of further credit ratings cuts if Spain itself is downgraded.
Telefonica, which boasts a large presence in Latin America
and across Europe in countries including Britain, Germany and
the Czech Republic, said Amerigo would seek investment
opportunities "outside of the main centres of venture capital
activity, such as Silicon Valley and London".
Technology start-ups are one of the only bright spots in
Telefonica's home market of Spain, where the unemployment rate
stands at almost 25 percent.
France Telecom and advertising agency Publicis
announced late last year that they were putting 150
million euros in to create a venture capital fund to invest in
promising internet start-ups in Europe.
Outside investors were expected to round out the fund
contributions to reach roughly 300 million euros.