Deutsche Telekom moves into Israel

T-Venture, the corporate venturing arm of Deutsche Telekom, has selected Magnum Communications Fund as its first Israeli fund investment, committing around ten per cent of the fund’s $70 million (euro 67 million) target.

Through T-Venture, Deutsche Telekom is seeking international exposure to a broad range of communications and IT-related ventures through a portfolio of both direct and fund investments, all of which are selected on purely commercial criteria.

The Magnum Communications Fund fits squarely within T-Venture’s investment remit, dedicated as it is to communications related investments across the Internet and e-commerce, software and hardware components and niche service sectors.

The new vehicle is the first dedicated venture capital fund launched by the Magnum Communications group, the fund’s general partner, although other Magnum vehicles have undertaken a number of venture investments. Modi Rosen and Yahal Zilka head up the venture management team.

The fund will invest both in Israel-based enterprises and in Israeli-related opportunities – ie, US or European companies involving Israeli entrepreneurs or managers, or with strong commercial connections to the Israeli market. Rosen says the fund is committed to a sector rather than an investment stage’ and will invest across the entire unquoted spectrum, including pre-IPO, and possibly even IPO, fundings.

Rosen reports that the fund is now close to its target level, having drawn commitments from financial and industrial investors in Europe and North America. European capital currently predominates, Rosen says.

T-Venture, which enjoys co-investment rights with the Magnum Communications Fund, will play an active role in technology evaluation for the vehicle.

Since its formation in late 1997, T-Venture has invested over Dm70 million (euro 36 million) in more than 20 companies. Direct investments include Broadband Network Design, DSPecialist, Intershop, MIND CTI Deutschland, S Punkt and The Fantastic Corporation, as well as an Israeli venture, VocalTech, an Internet telephony specialist. T-Venture’s fund portfolio includes positions in Amadeus I in the UK, GSM Capital in Canada and Strategic European Technologies in the Netherlands.