Bertelsmann has established a venture capital fund for digital media investments and created a company to execute these investments. With an initial funding of 50 million ($62.8 million), the mission
Bertelsmann has established a venture capital fund for digital media investments and created a company to execute these investments. With an initial funding of Euros 50 million ($62.8 million), the mission of the new Bertelsmann Digital Media Investments (BDMI) is to tap into new technologies and digital media innovations to support Bertelsmann's divisions across the media landscape.
Richard Sarnoff, president of Random House's corporate development group and its venture arm, Random House Ventures, will also serve as president of BDMI. He will report to Bertelsmann's CFO Thomas Rabe in this capacity and will continue to be based in New York.
"Bertelsmann has a keen focus on new technologies and fosters expertise within each of its divisions," says Gunter Thielen, Bertelsmann's chairman/CEO. "We are committed to further extending our innovative spirit and media leadership by creating a fund dedicated to emerging technology opportunities. Richard Sarnoff is the ideal candidate for this assignment, since he has excellent experience in funding such opportunities, strong connections in the venture capital industry, and broad familiarity with all of Bertelsmann's businesses above and beyond his responsibilities at Random House."
BDMI will operate in partnership with each Bertelsmann business division, taking investment cues from new business models and digital media trends identified by the divisions as strategic to future growth. It will work with the appropriate Bertelsmann division on each investment for initial evaluation, due diligence and ongoing oversight of portfolio companies.
BDMI's international team, based in the United States and Germany, will concentrate on digital media opportunities that can enhance or extend Bertelsmann's existing strengths in music, broadcast television, book and magazine publishing, media services and direct marketing. Investments will primarily be minority stakes in early-stage companies, but can also include majority stakes and external fund investments where appropriate.
"Technology continues to play an increasing role in all Bertelsmann divisions as digital media, the Web, and mobile access continue to converge on a global scale," says Sarnoff. "This new fund will allow us to supplement the existing in-house knowledge base and support ongoing divisional technology initiatives through investments in pioneering companies."