Telecoms group France Télécom-Orange and France-based communications company Publicis Groupe have jointly invested €150m in a venture fund and are targeting to raise €300m in total for the fund from outside investors.

The fund will look to back entrepreneurs setting up digital companies in France and the European Union .

France Télécom-Orange and Publicis said in a statement the sectors the fund is likely to invest in would be: "online marketing, e-commerce, mobile content and services, online gaming and social networks, as well as their associated technologies and infrastructures such as middleware, cloud computing, security, and online payments."

The fund will pursue seed and early stage deals, investing up to €1m, as well as later stage deals providing up to €15m. France Télécom-Orange and Publicis said the fund might invest outside Europe in the US and Asia alongside partner funds at a later stage.

Stéphane Richard, executive chairman of France Télécom-Orange, said: "French investment capital has been suffering for far too long from the absence of a solid ecosystem to link young companies together with larger groups, research centers and government systems. We are very happy to be working with Publicis Groupe to finance and support digital start-up projects. This is a surging growth market and it’s an important challenge: our job will be to contribute to the emergence of tomorrow’s leaders. From the point of view of France Télécom-Orange, the new fund complements our investments in research and development, as well as creating a terrific opportunity to be present at the birth of growth projects."

The fund’s investment decisions would be made by an investment committee independent of both France Télécom-Orange and Publicis Groupe, the two companies said.

Maurice Lévy, chief executive of Publicis, said: "All over Europe, there are young companies with powerful, game-changing ideas, and they’re not getting the financial backing they deserve. The need for a major, dedicated venture capital fund became obvious while Jean-Pierre Jouyet and I were writing our report on the intangible economy in November 2006, and it became even more clear during the e-G8 Forum on the digital economy that took place in Paris in May. I’m delighted that France Télécom-Orange and Publicis Groupe have been able to launch this fund to help budding companies blossom and create value in the digital economy, which has such huge potential for innovation and growth.We feel that this project is in the national and European interest, and I hope that we’ll be swiftly joined by other institutions and funds so that we can operate on an even more massive scale."

France Télécom-Orange set up venture firm Innovacom in 1988.