France-based venture capital firm Iris Capital Management has won its second corporate venturing mandate to manage a fund on behalf local advertiser Publicis Groupe and phone operator France Télécom-Orange.
Orange and Publicis Groupe have in aggregate committed €150m ($200m) to three funds under the OP Ventures (OPV) brand. OPV Growth will aim to invest €15m in established companies in France and the rest of Europe; OPV Global will invest in start-ups outside Europe, also with funds of up to €15m per project; and OPV Early Stage will provide seed-capital and early-stage investment of up to €3m to young companies in France and Europe. The first two funds are already operational with the Early Stage one starting in the second quarter.
Orange and Publicis Groupe will each acquire a 24.5% of Iris’s management company, with the rest retained by its general partners. Iris will continue to be run by managing partners Pierre de Fouquet and Antoine Garrigues, although its supervisory board will be chaired by Maurice Lévy, executive chairman of Publicis, with Gervais Pellissier, deputy chief executive of France Télécom-Orange, as deputy chairman. All investment and divestment decisions will be made by an independent investment committee.
In November, Iris also won the corporate venturing mandate from Saudi Arabia’s main phone operator, STC, although the latter’s senior adviser, Tom Sweeney, has left to set up Timar Ventures in the United Arab Emirates.
Guillaume Meulle, partner at Iris, said: "The funds will be managed separately except the OPV growth fund which will be managed in co-investment with our current ICF III fund. My past background (which is a bit old now [at France Telecom]) was not instrumental in the deal."
Stéphane Richard, executive chairman of France Telecom, which operates two in-house corporate venturing units in Innovacom and Orange Capital, said: "This joint initiative with Publicis Groupe and Iris is a pioneer in its field. It complements Orange’s considerable effort in terms of research and development, and it will encourage the emergence of future leaders of the digital economy by bringing them funds at several stages of their development."
Lévy added: "There are a lot of smart engineers and entrepreneurs in France and in Europe who are involved in projects that are innovative and exciting, and our plan is to get funds flowing to their businesses as fast as possible so they can flourish."
Iris has also gained commitments from state-backed investors, including the European Investment Fund (EIF) and Caisse des Dépôts et Consignations’ CDC Entreprises, to take the total manged by OPV to more than €300m.
Richard Pelly, chief executive of the EIF, which has also just launched an angel fund in Germany, said: "This initiative illustrates a sweeping change in venture capital across Europe: renewed interest from the corporate world in sourcing innovation through venture capital investments.
"As the leading venture capital investor in Europe, the EIF is delighted to have helped to structure this new initiative, which is part of a wider strategy to bring together large and small companies who can share much more than funding."
Henri de Lapparent, honorary chairman of Iris, was the founder of CDC in 1986 and spun off Iris in 2003. Philippe Braidy, current chairman of CDC Entreprises, said: "In today’s particularly challenging fundraising environment for venture capital funds, it is critical that initiatives be coordinated in order to achieve critical mass.
"The commitment of Orange and Publicis to invest in Iris’ investment vehicles already backed by CDC Entreprises within the FSI France Investissement program is a great opportunity for innovative and high-growth French tech, media and telecoms companies to find capital and expertise to support their development. The Caisse des Dépôts Group is the initiator and long time sponsor of Iris, which spun-off in 2003."
Including its deals while part of CDC since 1986, Iris has invested €870m in more than 200 companies, including Mediastay, an online games monetisation platform, and Searchmetrics, a Germany-based search engine company.