BT to spin off Brightstar business

The telecoms giant BT is today expected to announce that it is spinning off its Brightstar technology incubator business while bringing in two venture capital firms to give it more financial muscle.

Brightstar, which is part of BT's Ipswich-based research unit BT Exact Technologies, was set up to fund and develop businesses dreamt up by its technical staff.

BT is expected to announce that it has joined forces with the venture capital firms Coller Capital and New Venture Partners, to set up the new business with Brightstar.

New Venture Partners is a technology incubator that was spun out of Lucent Technologies – the US technology company where Ben Verwaayen worked as vice chairman before joining BT as chief executive last year.

It is thought BT will retain a stake in the new venture which will be known as NVP Brightstar and which is expected to start life with cash of about $100m.

Set up at the peak of the technology boom in early 2000 Brightstar invests in hi-tech companies which have the capacity to reach a market capitalisation of £100m in two to three years. It has invested in businesses such as Azure, which develops communications for disparate workforces.

Harry Berry, head of Brightstar, is expected to play a key role in the new venture. BT would not confirm the plans: "We continually discuss a number of options with various third parties about how to take Brightstar forward," a spokesman said.