Telstra seeks exit from $1B venture capital firm

Telstra is looking to cash out of venture capital firm Telstra Ventures to free up funds for its own investment program. Telstra founded the Silicon Valley-based VC in 2011 and spun it off in 2018. The company announced Monday it has rebranded to Titanium Ventures.

"Consistent with our focus on capital discipline and active portfolio management, we are exploring options to sell our current investments in Telstra Ventures' funds," CFO Michael Ackland said.

He said the telco believed it would continue to work with Titanium Ventures and be able to access leading-edge tech in its portfolio companies.

Titanium Ventures' past investments have included DocuSign, OpenGov, Box, CrowdStrike and GitLab. The company says it has almost $1 billion in funds under management and has invested in 99 portfolio companies, leading to 12 IPOs and 17 unicorns, and returning $678 million to investors. 

It says it will continue to target startups in the AI, digital and software sectors. Its current portfolio includes API security firm Cequence, AI call center play ASAPP and clean energy startup OpenSolar.

In Telstra's full-year financial filing last August, it reported a loss from Telstra Ventures and other unspecified investments of 83 million Australian dollars (US$55 million). In 2022, those losses were AU$199 million ($132 million).

Telstra holds a 62.5% stake in the Telstra Venture Fund II and 50% of Telstra Ventures III. Its last investment into Telstra Ventures was A$74 million in 2022.

Under its capital management program, Telstra is committed to annual capex of around AU$3 billion ($2 billion), with 5G capacity and expansion accounting for the biggest share. It has committed to increasing 5G coverage by another 100,000 square kilometers by June 2025.

Telstra's ASX stock closed 0.28% higher Tuesday.