France's leading venture capital group is expanding its operation in a move to stop European Internet and ecommerce startups from fleeing to Silicon Valley for funding.
Jean-Marie Messier, head of the $35 billion a year French services and communications group Vivendi, deflected but did not deny suggestions today that he would double, even treble, the $100 million available at his new V-Ventures venture capital fund
"V-Ventures will be active on both sides of the Atlantic, but a main aim is to dissuade European talent from going to Silicon Valley," Messier told representatives of 400 French, European and American IT firms at the Information and High-Tech Forum in Paris today.
Shareholders in V-Ventures include the French bank Sociiti Ginirale, which merged this week with another French bank Paribas to form a European banking giant. Other partners are the German Mannesmann engineering group and Belgium's leading financier Albert Frere.
V-Ventures, Messier said, had already assisted the start-up of several French firms. One was a company specializing in Internet sales points around France, while another was engaged in promoting on-line auctions of advertising space.
Messier, the French partner of AOL, said in a keynote speech that Vivendi's digital phone network would move swiftly from voice to data. "Email, train times, stock market information and bank statements will be available on mobile phones," he said. Several hundred people now had these services on a test basis.
Praising his government's recent market-boosting liberalisation of encryption, Messier said Vivendi and Bertelsmann, the German media group, were working together on a secure Internet payments system in the framework of the Global Business Initiative grouping 100 major firms. A preliminary code of conduct had been discussed at the World Economic Forum in Davos, Switzerland, last weekend.
He warned, however, that France was still running 18 months to two years behind the US in Internet technology and applications.
Messier's commitment to Internet was echoed by Dominique Strauss-Kahn, French Minister of Economy and Finances, who said France was closing the Internet gap following the sale of one million PCs last year and the emergence of 3.5 million Internet users.
However, he decried the low level of startup Internet companies saying more French researchers should move from the state sector to take advantage of government fiscal incentives, including stock option possibilities.
"There is a lack of entrepreneurs, but France, the country that invented the GSM standard for mobile phones, must not miss the new Internet revolution," said the Minister, who has taken a lead in promoting Internet in businesses and schools.
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