Telecoms giant Deutsche Telekom today announced it is boosting the amount of money it invests in new technology companies, setting aside an additional €500 million to be spent on startups over the next five years.

The move comes as an increasing number of large organisations seek to tap into the innovative technologies being developed by startups, either because they want to use the technology themselves or because they want to secure an equity stake in what they perceive to be the next big thing. 

Deutsche Telekom said it has approved the appointment of a new team of investment managers. They will work under a newly formed company called Deutsche Telekom Capital Partners (DTCP).

While the fund is pan-European, Deutsche Telekom said DTCP will have a "special focus" on Germany’s growing startup scene. 

Over the last 16 years, Deutsche Telekom has made investments into new technologies through a subsidiary company called T-Venture. 

T-Venture is to be closed down and all of the Deutsche Telekom's new investments will be made through DTCP. However, the T-Venture team will remain on board and continue to manage the existing portfolio of around 100 companies. T-Venture will also retain responsibility for follow-up investments within this portfolio. 

Tim Höttges, CEO of Deutsche Telekom, said DTCP combines the expertise and strength of a large corporation with the agility and flexibility of a small investment company. 

Vicente Vento, currently SVP of mergers and acquisitions at Deutsche Telekom, has been appointed to CEO of DTCP.

It is understood that DTCP will make several of the investments on a private equity basis. The company said this will allow the firm to invest in more mature companies that have been "outside the reach of a purely venture capital focus".

The amount of money being invested into European tech companies has increased significantly this year, with €2.1 billion (£1.64 billion) invested by venture capitalists in the second quarter of 2014, the highest quarterly total since the dot-com bust of 2001. 

Several other European venture capital funds have been established this year, including a $100 million (£63 million) Google Ventures fund and a $305 million (£193 million) fund created by venture capital group Balderton. 

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