T.Capital to supercharge Deutsche Telekom's strategic investments

Deutsche Telekom is expanding its strategic investment activity and raising its profile with a new brand, T.Capital, in its drive to accelerate innovation and gain access to new technologies.

Previously known as the Telekom Innovation Pool (TIP), which has small strategic investments in more than 40 tech startups, T.Capital plans to make bigger deals through significant minority stakes and, occasionally, majority shareholdings. In addition, T.Capital will advise DT on tech M&A opportunities, potentially from its portfolio.

The funding vehicle has already started to move in this direction. Examples of portfolio companies in which DT has recently increased its investment to significant minorities include IoT startup 1NCE and Israeli SD-WAN player Teridion. Both companies are deemed to have “immediate strategic impact on DT’s own business”, according to Alex Helmke, Managing Director at T.Capital.
“ DT is more actively putting its money where its mouth is when it comes to nurturing a strategic ecosystem by making investments of increasingly larger size.”

Joel Fisch, Vice-President, Ecosystem Foresight, Group Strategy & Transformation at DT, and co-Managing Director at T.Capital, said acquisitions “should not be undertaken lightly… We’re counselling to take it slow”. Buying an entire company should be the exception and only in cases when there is a “critical need” and acquiring is the only way to address it, he explained.

Such a need could arise from the transition to cloud and software-based communications networks, for example.
The type of tech acquisition that T.Capital would review would be in areas “where the changes going on now in the ecosystem directly impact our core products and make it necessary for us to consider acquisitions to remain a leader, as we are in Europe and the USA”, Fisch said.

It has made Web3 investments, but Fisch noted the tech was viewed as a separate category from the metaverse. For example, one of its portfolio companies, Helium, is a blockchain-based IoT network.
“We spend a lot of time checking in with [DT] stakeholders and business leaders to understand their priorities, their gaps, their challenges and then coming back to them with what we see in the market for cool technology and companies that can potentially be matched up to those needs”, said Helmke.
One of the areas where T.Capital is most active in looking for investments is in environmental, social, and governance (ESG) tech.

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