3TS joins Cisco on new CEE venture fund

3TS Capital Partners is co-operating with Cisco Systems on a new investment fund called 3TS-Cisco Growth Fund III. The fund will make venture investments in the new member states of the EU, as well as Croatia, Serbia, Ukraine and Turkey.

Although Cisco will not be involved in the investment decisions or the management of portfolio companies, it will serve as a "technical-due diligence partner" in the process. Cisco could introduce a newcomer company to its network of contacts, distribution partners and clients, as well as consulting companies.

3TS, in turn, will be Cisco's "eyes and ears" in the region. Cisco has been an active equity investor in start-ups and venture funds in China, India, Israel and Europe. It has a similar partnership with Swiss-based Index Ventures.

The company will employ a similar strategy in CEE as it did in other emerging markets: first it will partner with a local fund to familiarise itself with the region, later it will co-invest alongside the fund, and finally it will start making investments and acquisitions on its own.

Initiatives like this are likely to spur venture capitalism in the region, which is still in its infancy. (Page 08)

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