Telefonica announced on Wednesday that it will invest between €50,000 and €75,000 in return for a 10% stake in innovative start-ups, as its Wayra initiative comes to the U.K.
The scheme is designed to encourage local innovation and limit the flow of talent to the U.S. Chosen start-ups receive financial aid and six months of mentoring at special R&D centres referred to as academies.
“If they want to sell their product to Vodafone or to America Movil, they are more than free to do that,” Jose Maria Alvarez-Pallete, chairman of Telefonica Europe, said at a press event in London. “What we want is to create an ecosystem of start-ups in the places where we are already, so we don’t have to buy technology in other places.
“What we are looking for are these start-ups, these ideas that are still not companies… [that are] based on technology,” he said. “And we want to nurture them, we want to identify them, we want to take care of them, and we want to fund them.
Although Telefonica will initially limit holdings to 10%, Alvarez-Pallete has not ruled out taking further stakes in some of them. “[It’s] relatively inexpensive compared to what we normally do and the return – if just one of them is successful, will be enough,” he said.
The U.K. is the ninth country in which Wayra has launched. Argentina, Brazil, Chile, Colombia, Mexico, Peru, and Venezuela also have academies, while Spain hosts two. Telefonica is expected to establish academies in Germany and the Czech Republic soon. Telefonica will commit to ten investments per country, although the U.K. could be the first to see up to 20 start-ups receive funding. The launch of Wayra is part of Telefonica’s Think Big scheme, a three-part initiative aimed at helping talented young people get their ideas off the ground via apprenticeships and financial aid.