Funding for startups

Telefónica to Hatch Startups

1:50 PM -- Telefónica SA (NYSE: TEF) announced plans to launch a startup incubator and youth apprenticeship program across its European footprint at a press conference in London Wednesday, and it was quite an inspirational event.

It might sound a bit sappy, but I was impressed.

The initiative was born from Telefónica's desire to foster innovation and talent in the countries where it operates, after being continuously frustrated by having to go outside its Latin American and European territories -- and specifically to the U.S. -- to purchase the newest technologies and apps to meet the service demands of its customers.

So what's the program? The startup incubator is called Wayra, which means "wind" in the Quechua language spoken in parts of Latin America, and is part of the newly created Telefonica Digital division. Telefónica already has nine Wayra academies across Latin America, and each hosts 10 startup companies. (See Telefonica Holds Key to Digital Model, Telefonica Restructures, Creates New Units and Telefónica's Looking Trendy.)

Today, the Spanish operator launched the first European Wayra academy just off the Tottenham Court Road in London. Other Wayra academies will follow in each of the operator's six European markets. Telefónica said it is looking for 10 early-stage technology companies, each of which will receive about €50,000 (US$65,700) and be given working space in the new Wayra facility to help get them started.

The carrier has moved fast to put its program into action. Telefónica Europe CEO José-María Álvarez-Pallete said that Wayra was created from nothing in just three months. Hard to believe for a company the size of Telefónica, because "it's difficult for an elephant to dance," he admitted. "Rather than asking for permission, we asked for forgiveness when it was done."

In addition to its ambitions to foster early-stage startups, Álvarez-Pallete also said Telefónica was looking for the "Steve Jobs of Europe" through an apprenticeship program called "Talentum." By 2015, the operator said it hopes to fund 30,000 young people through scholarships and community projects and provide mentoring and skills training to some 250,000 students across its markets.

Youth unemployment in Europe is "very concerning," said Álvarez-Pallete. "Europe looks like a lost generation. These are our future employees, our future customers."

So Telefónica is making an effort to help young people in the current dire economy, and that sounds good. Although, come to think of it, the company didn't say anything about creating many, if any, permanent jobs for those tens of thousands of students it hopes to mentor, which is what they will really need.

Even so, Telefónica's bid to foster creativity and talent in Latin America and Europe is a bold move that won't cost it much and could pay off with the discovery of a new revenue-generating app or service.

As Álvarez-Pallete put it, "If just one of [the startups] is successful, then that's enough."

— Michelle Donegan, European Editor, Light Reading Mobile

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