Telefonica chooses stable of young ones to make it money in London

Telefonica's desks-for-shareholding deal, Wayra, has picked the lucky sixteen startups who'll benefit from central London office space, logistics support and business development, in exchange for percentage holding in the resulting business.

In exchange for ten per cent of the company the selected sixteen get get an average investment of €50,000, along with the free accommodation for the next six months. Companies can pitch for an extension of another six months, after which they're out on their ear as the purpose of Wayra isn't to build the UK economy or inspire a new generation, but to make money for Telefonica.

The sweet sixteen were selected, Dragon's Den style, from ten-minute pitches made by 30 startups over the week. The final list includes the usual social timelines and Twitter-trawling applications, along with an app store for enterprises and our old friends Blue Butterfly who won the Isobar NFC competition back in March with a wi-fi-configuration-by-bonk app.

They'll have to move out of Norwich though, Wayra requires it's companies to move into the Tottenham-Court-Road site in order to cross-fertilise ideas.

Despite being profit driven Telefonica isn't averse to the hyperbole which normally accompanies such incubator efforts. The operation's Director explains: "The old economy, that is familiar to many of us, is disintegrating ... What makes Wayra, and this judging process, so fascinating is that it gives a tangible glimpse into what that new digital economy might look like."

So the new economy involves panels of celebrity judges making token awards of oligopoly cash to eager students, in exchange for first refusal on the product and a decent shareholding in the company - like VCs only more television-friendly.

But at least the profit motive should keep Wayra focused, startups which can't stand on their own feet within a year will have to make way for the next generation. Telefonica promises to help companies develop, providing contacts and opportunities as well as resources. We'll have to revisit in a year to see if that happens. ®