Telstra Ventures renames itself Titanium Ventures as it dumps telco branding

Telstra Ventures will be renamed as the telco looks to offload hundreds of millions of dollars in investments from the fund it started a decade ago.

Telstra Ventures managing director Matthew Koertge said the fund would continue to focus on tech companies in the US and Australia.

Telstra is looking to offload potentially hundreds of millions of dollars in investments from the venture capital fund it started more than a decade ago as it sacks thousands of staff and races to achieve about $400m in cost savings.

Telstra Ventures, which Australia’s biggest telco founded 13 years ago before it became an independent fund six years ago, is rebadging itself Titanium Ventures as it seeks other partners, including Indian tech behemoth Infosys.

It has about $1.35bn funds under management and investments in 99 portfolio companies. While it’s had its hits, including 42 cashouts, which have returned almost $1bn to its investors, it’s had some misses, namely being a notable backer of collapsed crypto exchange FTX.

Telstra doesn’t disclose how much it has invested but in its latest annual report it said it had 62.5 per cent and 50 per cent stakes in Telstra Ventures’ funds II and III, which are both incorporated in tax-friendly Guernsey.

The decision to exit the venture capital fund represents a turnaround from it being the jewels in the crown under former chief executive Andy Penn, who said the fund was “a key part of our continued network and technology leadership”, to a more austere approach under his successor Vicki Brady.

Ms Brady announced last month that Telstra would axe 2800 jobs – or about 9 per cent of its workforce – saying it was struggling to compete with bigger technology companies as they poached the telco’s lucrative enterprise customers.

Telstra also withdrew from the federal government’s Climate Active carbon-neutral labelling program after the initiative attracted strong criticism that it was a “sham” and fraud on taxpayers and the environment.

But it is seeking to maintain a global thought leadership by joining a United Nations lobby group focused on the ethical use of artificial intelligence.

Telstra CEO Vicki Brady. Picture: John Feder

Telstra chief financial officer Michael Ackland said the decision to exit the venture capital fund was “consistent with our focus on capital discipline” and “active portfolio management”.

After injecting $74m into Telstra Ventures’ Fund III in 2022, no investments were made last year.

“We are exploring options to sell our current investments in Telstra Ventures’ funds. We believe that through the relationships we have fostered over the years, we can continue working together and Telstra will be able to access leading edge technologies in the portfolio companies of Titanium Ventures,” Mr Ackland said.

While Telstra’s is looking to exit Titanium Ventures, it still holds direct investments in other companies, including a stake worth almost $140m in artificial intelligence chip maker Nvidia.

Across its entire portfolio, Telstra generated a return on invested capital of 7.9 per cent last year – up from 7.1 per cent in 2022.

Titanium Ventures managing partner Matthew Koertge, who is based in Sydney, said he was grateful for Telstra’s support over the past decade.

He said the fund would continue to focus on AI, cybersecurity and climate tech, with about half of its staff based in the US and the remainder in Australia.

“We are very focused on finding world leading companies and world leading innovation. It’s no surprise a lot of that is in Silicon Valley, which is why our portfolio is weighted more heavily there. But I mean, there are lots of exciting companies in Australia, obviously also, so we’re still very actively looking into the market here,” Mr Koertge said.

“As a team, I think we’ve got very cool coverage across those two markets.

“We do occasionally invest in other geographies. We’ve invested in a couple of investments in India and Israel. Cyber security is a really massive area for us, and Israel is very strong in that regard.”

The fund’s US-based managing partner Mark Sherman said the decision to retire the Telstra branding was a “proud moment in our evolution”.

“We chose Titanium Ventures because it best represents who we are and who we want to be – a firm that backs very strong, resilient entrepreneurs who resist cracking under pressure. Titanium has the highest durability and strength-to-weight ratio of any metal in the world and like the leaders we invest in, we punch way above our weight,” he said.