2018 sets out to be another record-breaking year going by the amount of capital invested in German startups. Venture capital is growing rapidly in Germany. Not only are more checks written; we also observe a sharp rise in the number of funds based in Germany. This is for a number of reasons.
Why venture capital is on the rise in Germany
- Low interest rates and low returns in the public markets contribute to more capital being allocated to alternative asset classes like venture capital.
- A heightened awareness for the disruptive potential of digital technologies among German corporations has pushed many more traditional Mittelstand companies to shift their resources towards tech startups. This is directly observable with the rising number of digital units and corporate VCs. It also means that more companies seek to strategically participate in VC funds as limited partners.
- The first generation of German unicorns in consumer internet has matured over the last years which has produced recognizable success stories to pitch to LPs and wealthy entrepreneurs that return money to the ecosystem. Members of the founding teams of both Zalando and Trivago, for instance, are now active in VC.
The result of all this? VC funds in Germany are now more diversified, both in terms of geographies they cover as well as technological foci they maintain.
It’s time to shed some light on those newcomer VC funds. The following list comprises VC funds that are:
(1) headquartered in Germany, (2) invest in the German market, (3) were founded in 2016, 2017 or 2018.
Although the line is blurry at times, pure corporate VCs and company builders are excluded from the list.
14 young VC funds from Germany in the focus
Apollo Ventures (Hamburg) — started in 2017 Being the only fund in Germany (that I am aware of) with a dedicated focus on longevity and the ‘basic biology of aging’, Apollo Ventures is anything but the typical consumer internet VC. Since their start in early 2017, the firm has maintained a position slightly under the radar of European tech media. Apollo’s general partners are linked with TruVenturo, a successful company builder from Hamburg. Apollo Ventures geographic focus is Europe and North America and it will be exciting to see what investments they will make.
Bitstone Capital (Cologne) — started in 2017 Cologne-based Bitstone Capital is a niche fund with a sector-specific focus, in this case, PropTech and Real Estate. This is a large market that hasn’t experienced much disruption yet, so it will be interesting to see what difference this fund can make. Bitstone Capital’s MD was previously part of the board at fintech company builder FinLab, so we can expect to see professional execution and promising startups.
BlueYard (Berlin) — started in 2016 Although only two years old, BlueYard VC might already be considered a heavyweight in the German venture capital scene. Founded by two former Earlybird partners, BlueYard is a lean, thesis-driven fund with strong ties to the Silicon Valley. Specifically, BlueYard targets founders who have ‘transforming ideas that decentralize markets, empower users, and liberate data.’ They invest globally from a sizeable USD 120M fund and have positively impacted the Berlin ecosystem by moving blockchain and decentralized ledgers into the investor’s lens.
B10 (Berlin) — started in 2016 B10 or Building10 is an operational VC focused on seed-stage B2B companies based in Berlin. They specifically look out for companies that have the potential to become ‘category killers’. Their team supports portfolio companies in the areas of finance, UX, design, tech, and internationalization.
Catena Capital (Berlin) — started in 2017 Catena invests at the seed stage in companies in the Blockchain domain. That is, they are experienced with ICOs and actively look for entrepreneurs-in-residence and early-stage founders with ideas at the pre-ICO stage. In this sense, they really differentiate from the majority of traditional VC funds that are oftentimes restricted in their ability to participate in token sales. If token sales constitute a viable and sustainable source of fund returns is a different discussion alltogether.
Coparion (Cologne) — started in 2016 With a large team of experienced investors, Coparion is investing in companies from an impressive €225M fund at Series A and early growth stages. Backed by public funds such as KfW, Coparion writes tickets for startups in Germany only, always co-investing at equal terms with at least one other fund. Coparion is quickly building up one of the larger German VC portfolios investing in a broad range of industries and technologies. It’s worthwhile noting that Coparion is one of the more tech-savvy VCs in Germany with investments in hardware and industry 4.0 startups. They also have a small life sciences unit moving them into a different ballpark than most pure software VCs.
Crosslantic Capital (Bochum) — started in 2017 Located in the heart of the Ruhr valley, Crosslantic is a fairly new consumer internet VC that invests in early and growth stage. They are special, in that they take minority positions and often acquire equity stakes via secondary buy-outs taking positions of up to €20M. No details available here but this must be a pretty large fund. The founding partner of Crosslantic used to run ProSiebenSat1’s SevenVentures and, unsurprisingly, one of the value propositions of Crosslantic Capital is to offer access to advertising time. Maybe along the lines of ProSieben’s media-for-equity deals? Crosslantic has a geographic focus on Europe, Israel, and the USA and they have a small team located in NYC.
Cumberland VC (Berlin) — started in 2017 This is a fund operating in somewhat of a stealth mode with a business card-like website and little public information available. The LPs behind Cumberland are old German industrial families. Cumberland VC made a stellar first appearance when co-investing in a €40M Series A alongside June Fund and Access Industries in the digital therapeutics company Ada Health. The fund invests in a broad range of sectors and next-generation technologies. What stands out to me is a pronounced interest in AR and VR, technologies that haven’t created a lot of investment opportunities in Europe yet.
First Momentum Ventures (Karlsruhe) — started in 2018 Karlsruhe, despite being small, has two distinct advantages as a residence for investors: it is home to one of the best German technical universities, KIT, and it lies in the middle of one of the most productive and innovative regions in the world, Baden-Württemberg. First Momentum Ventures is trying to capitalize on the former aspect having raised €5M to date to invest in companies run by universities students. This concept was made popular in the US by First Round Capital’s Dorm Room Fund and it has an obvious appeal. Despite being a small fund, First Momentum Ventures can clearly make a difference by bridging the gap between the ‘safe haven’ of university research and starting a company with no money. The micro fund was founded and is run by 5 university students at KIT. Kudos for boldness and execution!
Fly Ventures (Berlin) — started in 2016 If you are looking for interesting seed funds in Berlin, Fly Ventures should be on the list. The seed-stage VC writes tickets between €250k and €1M, preferably in companies in the sector of business automation that use machine learning (of course!). The fund is run by an experienced team with backgrounds at Google and French VC powerhouse Partech. They have been quite active since their inception, already having invested in over 10 in promising young companies across Europe.
June Fund (Berlin) — started in 2017 Another exciting and much-underappreciated candidate on this list is June Fund. Here’s what is worth knowing: first, one of the founding partners at June Fund is Google’s Chief Business Officer Philipp Schindler who is likely one of the wealthiest and most influential Germans in Silicon Valley. It is exciting to see that he decides to mount a VC fund based in Berlin rather than, say, Palo Alto. Second, June Fund is one of the more daring VCs on the landscape already having participated in numerous ICOs and actively chasing frontier technologies. It will be exciting to see what investments June Fund will make from Berlin.
La Famiglia (Munich) — started in 2016 La Famiglia VC is another proof of the growing interest of old family-owned companies in tech startups. The early-stage investor is funded by family money from Siemens, Miele, and Viessmann, among others. La Famiglia thus may add value to its portfolio with their strong ties to old industries and a powerful network in the German business world. They certainly seem to be well connected in the VC world and have already invested alongside prestigious investors such as DN Capital and Atomico.
Rheingau Capital (Berlin) — started in 2017 With the inception of Rheingau Capital, the well-known company builder Rheingau Founders has been the latest organization to turn to full-scale VC. Previously, we already saw Rocket Internet shift their focus to VC with the vehicle Global Founders Capital, we saw Project A Ventures become an operational VC after starting as a company builder and we saw Point Nine Capital emerge out of Team Europe. Now, Rheingau Capital also set up a proper seed fund of approximately €50M. They invest between €1M and €2M per round in startups in the DACH region, preferably in the B2B segment. Check out their very shiny website to see how design can also make a difference in VC.
Seed + Speed (Munich, Hanover, Berlin) — started in 2016 Carsten Maschmeyer, one of Germany’s wealthiest and most notorious businessmen, is the founder of Seed + Speed. As the name indicates, this VC fund prides itself in fast decision processes and swift replies to startups. Telling from their investment history, they are not only focused on seed investments, however. They rather invest opportunistically in different rounds around the globe. Maschmeyer is famous for his sales experiences, so another benefit founders can hope to get from Seed + Speed actionable advice on building your sales processes and organization.
Some technical remarks
All the information in this article can be found in public sources on the web, most of it on the funds’ websites and Crunchbase. When reporting the fund size, I used the currency communicated by the fund itself or, if not available, the USD amount on Crunchbase. The funds are listed in alphabetical order.
If I am missing any funds on the list or some of the information is inaccurate, please let me know. This article will be edited for improvements.
I will be posting more insights into the German VC landscape in the future, feedback is always welcome!