(FOX Business) The Spanish telecommunications company Telefonica SA (TEF, TEF.MC) is working with the Spanish government to launch an investment fund for digital technology companies that will invest in Spain and Latin America, the company said.

Telefonica has agreed to commit EUR68 million ($85.4 million) to a EUR300 million “network of funds” that the company has dubbed Amerigo.

According to a statement from the company, the new fund aims to be a source for financing for technology companies “outside of the main centers of VC activity, such as Silicon Valley and London.”

Working through Telefonica’s digital business unit, the company’s commitment is aiming to create a network of “innovation funds” that will focus on Spain, Colombia, Chile, and Brazil, according to a statement.

Telefonica said that its Amerigo network is open to other companies and institutions that want to commit. In some ways, Telefonica looks to commercialize viable projects by providing a pool of capital and allowing venture capital investors to determine which start-ups represent the best investment opportunities.

The telecom company is reaching out to venture capital fund managers in the regions in which it operates to determine who will vet potential portfolio companies for the network of funds.

Other contributors to the initial EUR300 million fund were undisclosed, but the company said that it has the support of governments, public financial institutions, and other private partners.

Particularly, in Spain, the new fund is supported by the Innvierte initiative launched by the Centre for the Development of Industrial Technology. In Spain, the fund has already invested in five undisclosed technology companies.

The company said that its Amerigo network will invest at least EUR1 million in its deals. Telefonica already operates start-up accelerators of its own through its Wayra start-up accelerator. Wayra is currently working with 145 start-ups. Telefonica also has a venture capital fund, Telefonica Ventures.

Telefonica is not the only investor seeing investment potential in Latin America’s technology sector. According to data from the Latin American Private Equity and Venture Capital Association, information technology deals represented nearly 43% of total private equity deals by number through the first half of 2012. Overall, private equity deal volume in the region increased by 38% for the first half of 2012 versus 2011 figures.

Telefonica was unavailable for comment at the time of publication.