Telco’s Corporate Venturing

Thomas Grota, Investment Director T-VentureDeutsche Telekom AG

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Venture Capital is a tough and risky Business.

55% of US investments are written off

x<0.5 0.5<x<1 x=1 1<x<2 2<x<5 x>505

101520253035404550

% Cost % Value

62% of EU investments are written off

x<0.5 0.5<x<1 x=1 1<x<2 2<x<5 x>50

10

20

30

40

50

60

% Cost % Value

2000 2005 2010 2012

441

119 75 86

… low number leads to dominant VCs seeking Unicorn investments.

# of active VCs declined, big Funds raised.

Entrepreneurs need less capital to start… Thanks to cloud, viral marketing via social & easy payment.

1995 2005 2010 2014

4.000.000 €

400,000 €

40,000 € 4,000 €

Cos

t nee

ded

to st

art a

n IT

com

pany

TechnologyDrivers

Open Source

Cloud + AWS

DevelopersStart Companies

99% cost reduction

Cisco Amazon Microsoft LinkedIn Twitter facebook Alibaba

0.2 0.4 0.8 4.3

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Private investor capture gains today

Previous Tech Cycle

Current market cap:$139B+ $173B+ $347B+

$33B+

$30B+

$206B+ $212B+

New Tech Cycle

Market Capitalization at IPO ($B)

*) Data from Q1 2015.

104 150

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So the Markets have changed – and so did VCs.

Late stage financing produces lofty valuations

Seed Stage Early Stage Later Stage

Larger Later stage rounds after

validation

More seed rounds as costs decline & sources of capital increase

Traditional VC

Today’s VC

ValuationBetter equity position for early stage investors and founders

competitive areas(Big funds needed)

… When a concept works the competition is fierce.

T-Venture’s Portfolio of 100co’s

3 Unicorns & 5 IPOs$1B+ in Value

20+ Centaurs$100m+ in Value

40+ of Little Ponies$10m+ in Value

Where business runs Everywhere on…

We life in a complex World

Fast Secure ubiquitous

Networks

But before you can Sell digital

Data – Services – Apps – Productivity

You need to make them available & accessible

VCs invest in the Pillars of this World

Software-driven Space

Hardware-driven Space

Contents & Advertising

Social Networks

Security Platforms

Connected Computing

curr

ent v

alua

tion

Telco’s Chance to benefit

Partnering & Venturing

Contents & Advertising

Social Networks

Security Platforms

Connected Computing

Opportunities of Venturing

Opportunities of Partnering

Advertising is based on two things:

Big Data & Customer Insights

SCALE TECHNOLOGY&

Challenges of Today

“Mobility Demand”Connectivity everywhere

“Tsunami is here” Connected Devices (IoT)

“More needs More” Efficient data centers

“Secure Access” Platform Management

Telco Networks

Investments Today – 5y in Future

“Mobility Demand”

“Tsunami is here”

“More needs More”

“Secure Access”

Telco CVC

ETA Devices

Seek smart partnerships for reach and trust

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Seek smart partnerships for reach and trust

Like Startups – VCs are risking to burn $$$ of LPs