GWA Hygiene and Dräger: From collaboration to investment

How does a company specialized in medical and safety technology with a more than 130-year history end up getting together with a six-year-old start-up? Common goals, collaboration on an equal footing and good partners are key aspects in this regard. That is at least according to Jens Altmann, President Business Unit Data Business at Dräger, and Tobias Gebhardt, CEO at GWA Hygiene. Dräger, a global corporation, recently invested in High-Tech Gründerfonds (HTGF) portfolio company GWA Hygiene. In this interview, Altmann and Gebhardt speak about their new-found cooperation, the challenge of hygiene in the day-to-day running of hospitals, and their collaboration with HTGF.

Mr Gebhardt, can you give us a brief insight into the work of your start-up GWA Hygiene?

Tobias Gebhardt: The issue of hygiene in hospitals has not yet been brought into the digital age in many places. Hygiene teams often spend half their time collecting and evaluating data by hand, despite not being trained statisticians. We are helping to change this situation by fitting sensors to hand sanitiser dispensers, thus creating smart hygiene dispensers. We can ascertain how often and regularly hygiene stations are being used by staff and how much sanitiser is being dispensed. We then aggregate all this data and assess where there is potential for improvement in terms of hand hygiene. This helps to ensure that everyone involved is keenly aware of the issue of hygiene.

Mr Altmann, Dräger is very active in the field of state-of-the-art hospital systems, such as connected medical technology and services, and is helping to drive forward digitalisation.

Jens Altmann: Anyone who has been in hospital has likely seen or come into contact with a Dräger system. In our business unit “Data Business”, we are focused on applying digital processes to our devices and the procedures in place in hospitals, always with the aim of improving treatment and clinical outcomes. We rely on the increased use of data-driven solutions and on collaboration with partners such as GWA Hygiene.

How did your companies find each other?

Tobias Gebhardt: I spoke to a hospital hygiene specialist about the high risk of infection among premature babies; hygiene plays a particularly important role at incubator stations for newborns. As a HTGF portfolio company, we were invited to the High-Tech Partnering Conference where we got talking to Dräger very specifically about this problem. A few weeks later, we had our first meeting with Dräger in Lübeck. This resulted in an initial project being established at the start of 2021; since then a number of additional issues have been targeted.

So HTGF played a pivotal role. What added benefits do you gain from your collaboration with High-Tech Gründerfonds?

Tobias Gebhardt: Above all, credibility. If we just blindly sent out cold emails to large corporates, then the likelihood of us being listened to would be greatly reduced.

Jens Altmann: HTGF’s network is a massive help. HTGF has an incredible deal funnel. That helps companies like ours to gain impetus and ideas. Some fantastic projects have been established, such as our investment in GWA Hygiene.

How did you come to hear about the start-up, Mr Altmann? You obviously didn’t know about the company from day one of the collaboration.

Jens Altmann: That’s right. But we started to hear about the capabilities of GWA Hygiene. Last year someone came up to me and said: “Take a look at this company – they’re a cool team.” Shortly afterwards I was in the car on the way to Stralsund to meet GWA Hygiene. We hit it off straight away.

Right from day one?

Yes, I spent almost the whole day there. We discussed a great deal and developed many project ideas together. We were very much on the same wavelength. And then I headed back to Lübeck with all these ideas in my head. From my car I called our mergers and acquisitions team and said that we absolutely had to do something with GWA Hygiene.

How did you reach a decision to invest in GWA Hygiene?

Jens Altmann: It is really important for us to expand our knowledge and technology platform in the long term and to gain fresh impetus. I was always involved in very in-depth discussions with GWA Hygiene – right from my very first meeting. We see great synergies; together, the two companies offer all the right ingredients to create something new. We want to trace and digitalise chains of infection, while also automating the process. These are the firm foundations of our collaboration.

And what was your experience of the process, Mr Gebhardt?

Tobias Gebhardt: I found it to be very open, very transparent. We never felt like we had to plead, ask for money or worry that everything will hopefully be ok. We collaborate very much on an equal footing. For us, Dräger’s investment is a huge step forward; ultimately it’s the first strategic investor we now have on board. But what makes it feel extremely good is that Dräger has an exceptionally good technological understanding in our field.

Beyond the technological fit, would you say that culture is another very important aspect?

Jens Altmann: It is, of course, ultimately people that also drive developments and support cooperation. If everyone’s pulling in the same direction, then you can achieve a great deal. But if the fit isn’t quite right, then it doesn’t matter how many excellent capabilities you have – it just won’t work. The intensive exchange between the companies in terms of digitalisation is really important. And also cooperation – this only works on an equal footing.

A strong call for entrepreneurship

Think about your business from the perspective of the customer. Make sure you do not become arrogant. These two key tips to scaling companies come from someone who knows what he’s talking about. Prof. Dr. Dr. h.c. mult. Hermann Simon is one of the most experienced economic experts and advisers in Germany. He is also a professor emeritus who has taught at some of the most prestigious universities. In 1985, he founded the consultancy firm Simon-Kucher & Partners. Prof. Simon is the author of more than 40 books, which have been translated into 30 languages. He opens up about his story in his autobiography “Many Worlds, One Life: A Remarkable Journey from Farmhouse to the Global Stage”. In this interview, Prof. Simon talks about why he believes the German economy is highly innovative, and shares his take on the start-up scene in Germany. He also issues a strong call for people to show more entrepreneurial ambition. 

Prof. Simon, thank your for taking the time to speak to us. Let’s dive right in with the first question. How innovative is the German economy?

The German economy is very innovative on the whole. However, it doesn’t seem that way from the public’s perspective, partly because most innovations in Germany are not being seen. We don’t have any strong consumer goods brands like Procter & Gamble, Coca-Cola, Starbucks or McDonald’s; instead we are more present in the industrial goods sector. Cars are the exception here, although these are just machines that are sold to consumers at random. And this is something that is also reflected in the digital economy. We are much stronger when it comes to digital processes and products for industry than we are in the field of digital consumer goods.

Do we need to make sure that our achievements are being seen then?

Absolutely! There are numerous examples that underline the influence of German technology. Take LSTM, which stands for “long short-term memory”. This is something that hardly anyone knows about, although we probably use it multiple times a day. LSTM is the software behind Apple’s Siri and Amazon’s Alexa technology. It is installed on more than three billion smartphones. The brain behind the software is Jürgen Schmidhuber, a German computer scientist.
And there’s another example related to smartphones: According to Apple CEO Tim Cook, the company has 767 suppliers in Germany – an astounding number and a clear indication of just how influential we are in this country. We have many companies in Germany that operate in the background and are well and truly the innovation leaders in their field. They just often remain unseen.

Is that a disadvantage?

In terms of trade in the B2B sector, not really. A purchasing agent at an industrial company will ultimately know the market and who the best providers are. But when it comes to skilled workers and the next generation, it’s a big problem that young developers don’t know about our companies. Another challenge relates to raising capital. Chinese and American hidden champions in the digital sphere go to market at a very early stage and raise huge sums, which they then invest in growth. In contrast, Germany companies tend to remain family businesses, finance themselves through cash flows and therefore fall behind when it comes to expansion and investment.

Can it help companies to work more closely with start-ups – also as a means of strengthening their own research and development?

Collaboration built on trust can offer opportunities. It doesn’t necessarily work for everyone; it’s not something that applies as a general rule. For instance, many companies intentionally keep their research in house and are not keen on sharing their know-how. However, there are many other companies – such as traditional machine manufacturers – that lack in-house expertise when it comes to certain technological matters like artificial intelligence. In such instances, it can really make sense to cooperate with young, innovative companies. Indeed, it can generally be helpful to surround yourself with young people. I’m now over 70 and have amassed a great deal of experience; but my days of being a real innovator are behind me. Young people are essential for further development and innovation.

What’s your assessment of the start-up scene in Germany?

The start-up scene has gotten much better. I think the critical issue is no longer the number of start-ups around, but scaling. It’s a question of how you can turn a five-person start-up into one that employs 500 or 1,000 people.
This also has a lot to do with financing. I recently read an article about a start-up that researches rocket engines. They need €100 million for their ongoing development work. Unthinkable sums in Germany.

How can we ensure that German-made innovations also make a lasting contribution to value creation here in Germany?

That is indeed a major challenge, but it isn’t a new problem. I said 30 years ago that if our companies were as good at marketing as they are at research and development, then they could generate much higher revenues. One of the reasons for this is to do with education. When I was at MIT for my postdoc, I learnt that most young engineers there also undertake an MBA. They study business. This is something that would really benefit many of our scientists and engineers. But the good news is that our younger generation is now adopting a more entrepreneurial way of thinking. This is a really great development.

How can a company be scaled properly?

There are two really important points here. The first is to define your own business from the perspective of the customer. Only when I know what my customers will need in future can I develop in response to these requirements. The second point is to make sure you do not become arrogant. Success is the worst enemy of innovation. I don’t think that German hidden champions are too arrogant. But I’ve met many international companies in my time who have been adversely affected by arrogance. There aren’t too many of them around any more.

In your autobiography “Many Worlds, One Life: A Remarkable Journey from Farmhouse to the Global Stage”, you write about how you set up your consultancy firm. What is your personal experience of this? How do you get a major company off the ground?

My wife and I actually had very steady careers. She was a teacher and I was at university; on the traditional career path of a civil servant. However, we both felt an urge to dive into the world of business. She founded a media company, and I started the consultancy firm. Three years after setting it up, I got my first offer for the company – we only had a team of twelve at the time. I could have sold, but I wanted to remain a businessman. I find it very troubling that many young people simply hand over what they have built up when the first offers come calling. I’d like to issue a strong call for people to show more entrepreneurial ambition.

Quantum technology at the High-Tech Partnering Conference: Experience new opportunities  

Many experts believe that quantum technologies will take digitalisation to a whole new level. These technologies are set to unlock more powerful measurement tools than ever before, enhance communication security and support logistics processes – and solve previously unsolvable problems with the help of their vast computing power. But what is the technology already capable of? How can it be leveraged by industry? What are its initial applications? And where do start-ups, the research sector and companies currently stand in Germany? In this interview, we spoke to Johannes Verst, CEO of the Quantum Business Network (QBN), and Christian Ziach, Senior Investment Manager at High-Tech Gründerfonds, to find out.

You’ll both be participating in a deep dive panel discussion at the High-Tech Partnering Conference (HTPC) hosted by HTGF on 12 April, where you’ll be talking about the opportunities presented by quantum technologies and the impact they will have. Why is this such a relevant topic?

Johannes: Quantum technologies can be used in every major industry sector. Quantum computing, for example, can solve highly complex problems that would take today’s high-performance computers thousands of years. Classical computers and smartphones work on the basis of bits, which can have two possible states – either 0 or 1. Even though it’s hard to imagine, we will need to leave this binary mindset behind in the quantum world. Quantum computers work with qubits, which can have an unlimited number of states – including at the same time. Multiple qubits can also be entangled. I’ll give you a comparison: Doubling the performance of classical computers requires double the number of bits, while quantum computers just need one additional qubit.

Can you give an example?

Christian: One obstacle currently facing modern applications in the field of artificial intelligence is the lack of computing power to process data fast enough. Quantum computing will change that, catapulting products and innovations to a whole new level. This will enable ultra-complex calculations in engineering, finance and medtech. Another example I can give is molecular modelling in the pharmaceutical industry. Simulating molecular structures enables the composition of active ingredients to be calculated individually, which could help optimise interactions between individual active ingredients in cancer treatments. However, today’s quantum computers are still too prone to errors and do not yet have the requisite computing power. Meanwhile, applications in the chemicals industry have come a whole lot further. The simulation of simple molecules in their environments could surpass the possibilities of conventional computers in the foreseeable future – HQS Quantum Simulations, one of our portfolio companies, is working hard on this topic together with industry partners.

Are there any other possible applications aside from the calculation of complex computations?

Johannes: You bet! Take quantum sensors, for instance. Ultra-sensitive quantum sensors are set to be utilised in the fields of mobility, energy, geology and the IoT, as well as in healthcare. They can be used in brain-computer interfaces to detect and research diseases such as dementia, as well as to improve cancer screening and make autonomous cars safer.

Christian: They can also be used in the field of communication. Today, we live in a highly connected world, with various types of data – including sensitive information – needing to be shared in real time. Quantum communication systems will drive a step change in this respect thanks to their encryption and decryption technology.

Johannes, you’re CEO of the Quantum Business Network. Can you tell us what the network does?

Johannes: QBN’s goal is to build a quantum industry in Europe as part of a collaborative approach. Our members include established companies, start-ups, research institutes and universities along the entire value chain, as well as ministries and public bodies. We identify the latest trends and developments in R&D and business, work on joint execution, initiate collaborations and give this field as a whole more visibility. But we also provide our members with practical support, offering assistance with business development and helping to find investors, for instance.

Where do German companies stand?

Johannes: Large-scale companies do indeed have experts that are working on the topic, although the technology is still in its infancy. As a result, companies often don’t give the topic the attention that I feel it deserves. But I’m pleased to see that interest is growing, and we now have an increasing number of SMEs reaching out to us.

Christian: A lot of managers are still busy overseeing the fundamental digitalisation of their company. They are often completely unaware that quantum technologies will unlock entirely new possibilities that will also need to be addressed. Aside from learning about the topic, it’s also a question of having the necessary capacities and expertise within the company.

Christian, what is HTGF aiming to achieve with its investments in the field of quantum technology?

Christian: As a seed investor, we finance promising business models that shape the ecosystem. So this also extends to start-ups that provide infrastructure for quantum technology. I’m delighted that our portfolio company kiutra will be joining us at the HTPC. The start-up develops magnetic cooling systems that enable industrial quantum technology applications in the first place. I’ve already mentioned HQS Quantum Simulations, which will also be attending the HTPC. The start-up provides software that material scientists in the chemical sector and in the scientific community can utilise to simulate quantum systems. HQS is working on quantum-level models of materials and their molecular properties, and thus supports researchers. Quantum technologies are also giving rise to a whole new industry. In addition, established companies will also need to create innovative, superior products. In Germany and Europe alike, we urgently need to become competitive in this field and drive innovation. A quick glance towards China and the United States shows just how much research and work is being invested in this field.

What other insights can HTPC attendees expect to gain during your deep dive talk?

Johannes: We’ll showcase technologies and illustrate the possibilities they offer. Christian has already mentioned two start-ups that will take part in our quantum deep dive discussion. I’m also looking forward to being joined by Quantum Brilliance, which is also a QBN member. The company utilises nitrogen-vacancy centres in diamonds to build quantum computers. The systems can work at room temperature and can later be installed in autonomous vehicles, for instance.

Christian: The HTPC has always been a platform of knowledge for exploring high-tech solutions and innovations. The deep dive talk on quantum technology is a special offering within this platform. We want to make it an easily accessible topic for Germany’s medium-sized companies in particular, as well as for corporations, and to connect them with the relevant network partners. Attendees will gain a clear picture of this new field of technology, especially in terms of the current level of knowledge and potential applications in industry.

The new HTGF Academy: “Knowledge transfer shouldn’t just happen by chance”

Since 2019, High-Tech Gründerfonds (HTGF) has offered a broad spectrum of knowledge to its portfolio companies through the HTGF Academy. The platform is now set to be systematically expanded, with fund investors, entrepreneurs outside the HTGF portfolio and other members of the start-up ecosystem now also benefiting from the seed investor’s nearly 17 years of experience. During that time, HTGF has completed more than 650 seed investments and almost 2,700 transactions. In this interview, Alex von Frankenberg, Managing Director of HTGF, and Claudia Raber, Partner Relationship Management at HTGF, talk about the new knowledge platform and explain why it’s important to continue sharing experiences.

Thank you for taking the time to speak to us. Let’s start with an easy question: What is the HTGF Academy?

Claudia Raber: The HTGF Academy is a central platform through which we aim to promote knowledge transfer using a variety of formats. Last year, we held 18 events focused on various topics that our portfolio companies are interested in. The subject of leadership, for instance. We got a fantastic expert to speak about this topic, Ms Dorothea von Wichert-Nick. She is an entrepreneur and author who established the “From founder to CEO” event. At this event, we help entrepreneurs to carve out a new role for themselves in a rapidly growing organisation. We also deal with topics such as sales growth and cash management.

Alex von Frankenberg: And we’ve made a great start with this year’s programme. In January, we held an event on the subject of internationalisation. And we’re showing our portfolio companies the not-so-easy route to the stock exchange. The events were so well received that we’ve now decided to systematically expand HTGF’s knowledge sharing platforms and to also make them available for other groups such as our fund investors.

Why did you decide to expand the Academy’s offerings?

Alex von Frankenberg: Because we’re constantly recognising what an unbelievably expansive range of knowledge we have amassed at HTGF. And we keep acquiring new knowledge; our learning curves continue to grow at an ever steeper rate. We’ve been around for a long time now, are extremely active on the market and learn something new each time. At the same time, we are continuing to expand our network. Last year alone, HTGF was involved in 239 transactions – and every single one of them helped us gain experience and expand our knowledge. We’d like to share this knowledge and make it available with the help of internal and external experts.

Claudia Raber: Among the various stakeholders in the start-up sector, we’re seeing a major need to obtain knowledge and to share exchanges with others in the network. HTGF has been around since 2005. We have three successful funds – and are currently in the middle of fundraising for the fourth fund generation – more than 650 investments, over 150 exits and three IPOs. We also have a very strong team and a large network. The academy enables us to satisfy the needs of our stakeholders by tapping into the in-depth knowledge and experience that is embedded within HTGF.

What do you offer company founders?

Claudia Raber: Even before founding a company for the first time, we can provide them with valuable tips and show them what to watch out for when implementing their ideas and plans. And then of course there’s what we have to offer for our portfolio companies. The Academy is a fantastic opportunity to remain well-informed and be kept up to date. Many of our companies are also looking to share experiences, and we offer a number of opportunities to do so. We host various “matching” formats, for instance, in which our portfolio companies can network in an exclusive setting with potential investors or customers and cooperation partners.

Alex, you mentioned the fund investors. What additional benefits do you offer them through the Academy?

Alex von Frankenberg: We provide investors with an exclusive range of knowledge, giving them access to important insights they can leverage to develop their company. We believe that knowledge transfer shouldn’t just happen by chance. Instead, it must be systematically channelled so as to generate real added value. The investors gain access to a large network with a high level of expertise. In addition to our portfolio, identifying trends and creating opportunities for cooperation, the new Academy is a fantastic addition to the range of benefits that HTGF already offers.

And is this something your employees can benefit from?

Alex von Frankenberg: Absolutely! New employees, especially those who aren’t overly familiar with the investment sector, can learn and get to know the environment very well and very quickly. But members of the team who have been around for longer are also able to stay on the ball and further their development.

And what are the next steps?

Claudia Raber: We’re already making strides. We’ve updated our website, where you can now find an overview of what’s on offer. Portfolio companies and fund investors are able to view all exclusive events at a glance. We will announce public sessions on LinkedIn – and registration is simple. We’re planning a highly diverse programme for all who are interested.

“Industrial tech harbours a wealth of innovation potential”

Markus Kückelhaus has spent over 25 years driving innovation, strategy and financial topics for corporations – and has worked with many start-ups in the process. The 53-year-old has now joined High-Tech Gründerfonds as a partner. In this interview, he outlines the opportunities that arise when corporations and start-ups cooperate, takes a look at industrial tech trends, and reveals what he expects from start-ups in Germany.

Welcome to HTGF, Markus. We’re delighted to have you on board. Would you like to introduce yourself?

Thanks for the warm welcome, and sure, it’d be my pleasure: I have been working on innovations, finance and strategy topics for over 25 years now, including in my previous role at Deutsche Post DHL Group, where I was responsible for the company’s innovation activities as Vice President Innovation & Trend Research. And since Deutsche Post DHL is a HTGF fund investor, I also got to know High-Tech Gründerfonds really well through our close collaboration. That’s why I’m especially thrilled to have the chance to join and support the team here with the experience I have gained.

Markus Kückelhaus, Partner Industrial Tech at HTGF

How would others describe you?

That’s a good question. They would perhaps say that I’m a really good judge of what will work – and what perhaps won’t – when it comes to innovation. Amid all the hype that so often surrounds the world of technology, we all need to differentiate between which topics are relevant and which aren’t. And I’m relishing the chance to do so at a VC in the early seed stage. HTGF was highly professional in our dealings over the years. I always felt our collaboration was one built on a spirit of mutual appreciation and friendship. It’s this combination that convinced me to join the team.

You still have a somewhat external perspective to draw on. In your previous role, what did you value in your collaboration with HTGF?

As a HTGF fund investor, Deutsche Post DHL Group – and also myself as a representative on the investment committee – gains a great deal of insight into the start-up ecosystem. The screening performed by HTGF here in Germany is quite unique, and it presents major corporates with an excellent opportunity to discover technologies and trends. At Deutsche Post DHL, we frequently cooperated with HTGF portfolio companies and conducted proof-of-concept testing for innovative solutions – from cleaning robots to inventory drones – to explore their use in logistics settings. Thanks to these tests, it quickly became clear which technologies would hold up in the tough world of industry, and how the specific costs and benefits would stack up.

You said at the start of our interview that it’s important to evaluate what will work and what won’t. What does that mean for start-ups? What does work when collaborating with corporations?

Start-ups need to understand that corporations are interested in systemic solutions, not just technological components or a piece of hardware. They want to realise efficiencies, expand their portfolio or facilitate new business models. In my experience, it’s something that a lot of start-ups struggle to grasp, especially in the industrial sector, and they run the risk of focusing on a single technological component they’ve developed rather than thinking in terms of systemic solutions. Corporations need solutions that can be deployed for a number of years. And with everything that entails, of course.

What do start-ups need to consider when they begin working with corporations?

At the start of a collaboration project, large companies ask themselves the following questions: How far do we want to go? How much do we need to invest? Innovations that optimise internal processes and thus reduce costs, for example, are of course quick wins. In this field, this is one of the easiest ways for start-ups to start doing business with corporations.

When do things get tougher?

When corporations want to use a start-up idea to tap a new market, things can quickly become more complicated as they have to set up new structures. It becomes even more challenging when they want to integrate a new product that falls outside of their core business. Both sides – corporations and start-ups alike – need to be aware of these processes. And this needs to happen at quite an early stage so that they can gauge what will – or perhaps won’t – work, like I said before. Moving forward, this is something that I’d like to help both sides with, by sharing my experience.

In your previous role, you worked with start-ups from around the globe. What are your thoughts on the scene here in Germany?

It’s quite incredible to see what’s coming out of Germany, especially from the research being conducted at universities and institutes. At the same time, though, I’d like to see more courage to launch and scale good technological solutions at a faster pace. I sometimes feel that this courage to scale is in somewhat short supply in Germany, especially compared to other countries. But the bedrock of good ideas, technologies and business models here in this country really is great.

You’ve taken on the role of partner for industrial tech. What are the major trends you see?

Robotics coupled with automation remain a huge topic that is relevant for the entire manufacturing industry. Robot gripper technology has really come on leaps and bounds in recent years, but there’s still some potential to be unlocked, such as in combination with computer vision. We’ll also see a lot of advances in human-machine interaction, such as with bionic enhancement. It’s less a matter of “human or machine”, but rather “human and machine”. How can smart glasses, exoskeletons and other technologies help humans go about their work? On top of that, you also have the Internet of Things (IoT), which will remain a relevant topic. And in this field I’m hoping to see developments moving away from silo solutions.

Could you share some more details?

There’s been a been a great deal of hype over IoT for years. But so far there’s been lots of individual solutions. We now need to come up with an answer to the following question: How do we take this combination of hardware, software, new transmission technologies like 5G, and analytic capabilities, for example with the aid of artificial intelligence, and leverage it across value chains. Especially in the industrial sector, which is a lot more fragmented than the consumer market, we still need to find good answers. And that’s why this is an area that, much like the entire industrial tech space, harbours a wealth of innovation potential.

Important developments to watch out for in 2022

Implementing good ideas very well

In 2022 we’ll be looking beyond the pandemic. If the extreme developments are able to be kept in check, we could see the economy recovering and picking up quite rapidly. Start-ups from the travel and consumer sectors in particular can expect to enjoy a resurgence, and B2B orders that had been pushed back can finally be implemented.

I also foresee a very positive development in terms of sustainability: A transformed political landscape, society’s continued desire for change, and companies’ growing willingness to actively invest will further drive developments and innovations. I see huge opportunities unfolding for start-ups that manage to implement a good idea very well.

First and foremost, however, 2022 should be a year in which we seize all available opportunities to lay the foundation for greater tech leadership and also take the initiative when it comes to highly scalable trend topics. That really would make 2022 a lasting success!

Dr. Tanja Emmerling

Investing more energy in researching infectious diseases

The pandemic has demonstrated what science is capable of. It’s fascinating to see just how quickly companies have been able to develop effective Covid vaccines with good tolerability profiles, with mRNA technology set to become increasingly relevant. As a society, we’ll need to invest more energy in researching infectious diseases and treatments in general as we move into the future – whether it’s to combat viruses or bacteria that have become resistant to antibiotics. In addition, the renaissance in diagnostics will grow stronger in the coming year. And we can see just how important that is: It used to take a number of days to distinguish between virus variants, such as the omicron and delta variants, and to gauge the consequences that the emergence of new forms of the virus will have. But this is now happening widely, and in a matter of hours. I strongly believe that we’ll experience significant advances in the way health data is evaluated. Machine learning will become more relevant and will, for example, be used to help interpret gene sequences or image data. However, algorithms are reliant on input data quality. That’s why thorough scientific research – and thus collecting accurate data – will remain of paramount importance moving forward.

Dr. Bernd Goergen

A year of pioneering technologies

2022 will also be a year in which innovation and pioneering technologies are in focus across all areas and industries. The crucial aspect will be how business and society as a whole embrace the surge in technological advances and harness them for our benefit. When many companies talk about artificial intelligence, they’re only really talking about big data topics. But AI has more to offer. I am certain that we’ll see a huge leap in the near future, and that we’ll reach a whole new level where the things that seem impossible today become reality. There’s a great deal of potential to be leveraged here, such as in decoding complex biological processes and healing illnesses, or also in the energy sector, with the management of renewable energy generation and decentralised electricity grids. Decentralisation is a trend worth highlighting in general, and one that will enjoy a strong development in 2022. This also includes blockchain technologies, with Europe in a position to gain significant competitive advantages over China and the United States thanks to its decentralised structures. And I’m also sure that we’ll see more robotics applications, both in the industrial sector as well as in the public sphere. A number of Asian countries are already using service robots on their streets, and that’s something we’ll be seeing more of here in Germany in the coming years.

Markus Kreßmann

New opportunities with quantum technology and new space  

We’ll have huge opportunities in 2022. We’re learning to live with Covid and we’ll get better at managing the epidemic. The new German government will inject fresh ideas and generate significant momentum. I’m confident that the problems like the current supply chain bottlenecks will be overcome and that normality will return to many parts of the economy. So there’s a good chance we’ll see a new spirit of optimism, and greater courage in our society when it comes to innovation and new developments. I strongly believe that innovations will become more and more important in our society. Start-up technologies are becoming more relevant and can generate a high societal impact – take Biontech for instance. Trend topics of the past, such as sustainability, are becoming increasingly relevant. Here at HTGF, we’ve been active in this area for quite some time already, and we are aware of the great potential for change that our start-ups possess. Current trends such as quantum technology and new space, i.e. innovation and new business models involving quantum computing and space, are entering the spotlight. The new technologies being born here have the potential to permanently transform an array of different industries.  

Klaus Lehmann

World of work in flux – Constant battle over talent 

One of the key themes for start-ups in 2022 will be: How do I go about finding the right employees to fuel further growth. It’s not just corporations and mid-sized firms that are feeling the impact of the skilled worker shortage, as young companies are also being hit hard. My advice for start-ups is to ensure recruitment and employer branding form a core element of their corporate strategy. Compensation packages are interchangeable. It’s vision and company culture that make all the difference when companies are vying to attract the most talented candidates. 

In parallel to this, there’s also another development impacting the labour market in particular. I believe that software will remain a key driver of innovation across all industries. And this especially includes topics relating to AI, which in the medium- and long-term will take over tasks that are performed by humans today. It’s a development that we’ll have to keep a close eye on as a society. 

Romy Schnelle

Post-merger integration as a key factor for successful acquisitions  

An acquisition is far from over with the signing of a contract – what then follows is the important process of integration. This is why High-Tech Gründerfonds (HTGF) is offering a think tank on this topic at the High-Tech Partnering Conference in February. The aim of the think tank is to discuss the topic with experts from different viewpoints. In this interview, Anke Caßing and Axel Nitsch, both principals at HTGF, provide a bit of background on the planned format. 

You are planning a think tank on post-merger integration (PMI). Can you give us a brief introduction? What exactly is it about? 

Axel: Numerous studies indicate that many companies fail to achieve the goals they set themselves with an acquisition. In this context, post-merger integration is often an important aspect. 

Anke: In the many preliminary discussions we have held with experts, we have clearly seen that successful post-merger integration takes place at various levels. Examples include the rapid standardization of accounting and reporting, the integration of process landscapes and, above all, the merging of different cultures from two separate companies. This is why such a merger is a highly complex process. It is important to look at it from different angles. 

Are there typical processes that characterize a PMI? 

Anke: First of all, such an integration is very specific to each company. There are numerous factors and influences that determine the course and nature of such a PMI. For example, there are acquisitions that entail a clear transfer of technology. A large company acquires the know-how of a start-up, and the integration subsequently focuses on how the buyer can develop its own product from this technology. The focus is clearly on knowledge transfer.  

Axel: It’s different when taking over an existing business model, for example. A young company or a start-up has turned an innovation into a product and has already established itself in a market. Here, acquisitions are aimed at taking over the entire business model. Of course, finances and reporting also need to be consolidated, which can happen rather quickly. But depending on how deeply the company is to be integrated, culture plays a decisive role. 

Why is this topic so important to you? 

Anke: One of HTGF’s goals is to connect large and medium-sized companies with start-ups. Even though we as HTGF are no longer involved in the integration after an exit, we think it is important to shed more light on the topic for our portfolio companies and potential buyers. We want to give the opportunity to share experiences at the conference: What do you have to pay attention to? What are mistakes that can be avoided? That’s exactly what we want to take a closer look at during this think tank.  

Axel: The topic is often given too little attention, as was repeatedly pointed out to us during our preparations. Often, not enough time and resources are allocated to the complex process of post-merger integration. The conference is aimed at partnerships between established industrial companies and innovative start-ups. Acquisitions are clearly part of this and the HTGF network includes many professionals with a lot of relevant experience. We want to share some success stories and practical approaches that can be put into action.   

 Who will be the guests at the event?  

Axel: Our aim is to bring together experts from different areas. We look forward to welcoming Ralf Temporale, Head of Strategy, Consumer & Operations, Talent Partner at EY, who has directly supported many such integrations. He will certainly have a lot to tell us about the integration of branding, culture and employees.
We will also talk to Sven Hänchen, Business Development Manager at Wolters Kluwer, an information services provider from the Netherlands. Acquisitions are an integral part of their business strategy. He will also provide valuable insights and talk about the depth of integration – an important aspect of PMI.  

Anke: We are looking forward to welcoming Sara Khan, VP of Legal Affairs at LTN Global, one of the leading media technology companies. We will also be joined by Bernd Gross, who will be able to report from his first-hand experience. His IoT company Cumulocity was acquired by Software AG in 2017 – today he is CTO of Software AG.  

Axel: He will also address the topic of incentivization. What incentives does a company offer to retain or even change a management team? This important aspect is underestimated all too often.  

And why do you refer to this format as a think tank? 

Anke: Because we look at the topic from different angles. We start with short keynote speeches delivered by the experts. Here, we get an initial insight into their experiences. We then jump into a panel discussion and delve deeper into the various aspects.  

Axel: And of course we also want to engage in discussion with the conference participants. A format like this thrives on discussion. After all, our aim is to have a comprehensive exchange of experiences in which everyone can learn from each other and take away important impulses. 

The added value of collaborations

How can established companies and start-ups develop side by side? The secret is cooperation, to which HTGF attaches particular importance. Alex von Frankenberg, Managing Director of HTGF, picks up on a number of successful examples from the roughly 200 collaborations between portfolio companies and fund investors to show why in some cases one plus one equals three.

Alex von Frankenberg, what would you say are HTGF’s main tasks? 

HTGF is a seed investor. And as this description suggests, we are often the first investor in a start-up. While we may sometimes be the sole investor, we’re also really happy to have other investors on board, too. When making these investments, we ensure that the start-up is well positioned after the seed round. For instance, we make sure that the intellectual property is fully retained by the company and that reporting processes or an advisory board are established.  The most important goal in the seed phase is to secure a Series A funding round. However, often there is very little time to achieve this aim – usually just 12 to 18 months. We provide assistance with strategic issues such as product/market fit, offer support with recruitment through our network of contacts and act as a catalyst for fundraising, for example by opening doors to follow-on investors.  

HTGF is often seen as an interface between portfolio companies and fund investors. Can you elaborate on this role? 

It is important to understand that our private investors are not solely interested in returns. This is obviously one of the aspects they consider, but they primarily want to secure tangible added value for their companies.  

And what would that be? 

We work closely with investors beyond just the fund investment in itself. We are firmly committed to providing our investors with access to the knowledge, experience and network that we have built up over the past 16 years. We help to maintain collaborations between fund investors and our portfolio companies. We want to strengthen our fund investors’ innovation capabilities, inspire them, connect them, and of course open the door to co-investments or acquisitions. 

You just touched on the subject of cooperation. What form does this take? 

There are many different types of collaboration. For example there’s R&D cooperation, where research is conducted on a collaborative basis. Then there are sales collaborations where a large company uses its power to market the product of a young company on a global scale. Or the two companies make joint purchases and take advantage of the better conditions of the company with the greater sway. But it can also go in an entirely different direction. For instance, our fitness company eGym is helping our fund investors Fraunhofer, EWE and DHL keep their staff fit and healthy. 

Looking back at the previous funds, can you give us any examples of particularly successful collaborations? 

There are so many. We’ve helped establish roughly 200 collaborations in total. Off the top of my head, I would have to think of Juniqe, an online shop for art enthusiasts that we’ve been involved with since 2014. Juniqe is collaborating closely with our investor Cewe. Europe’s largest photo service provider produces prints for Juniqe, not only generating sales for the company but also helping it to learn from the approach and spirit of the start-up. Elsewhere, our fund investor Bosch and the Bonn-based start-up Code Intelligence have joined forces to help make software safer in the automobile sector. Another example that springs to mind is the Swiss start-up AMAL Therapeutics, which we financed together with our fund investor Boehringer Ingelheim. Boehringer then bought the company for several hundred million euros. 

So one plus one makes three in a way? 

Exactly. In the best-case scenario, that innovative spark gets passed on. The small company comes up with a new technology or business model, and the large company learns from it without having to compete with the portfolio company. The investors gain fresh impetus and insight to help drive their cultural transformation and digitalisation while also developing or adding to their core business in a targeted manner. This worked extremely well in the case of Solandeo, for instance. The Berlin-based tech firm specialises in smart metering solutions and intelligent forecast and analysis products. For a large energy company such as EWE AG, this start-up was electric – in the truest sense of the word. EWE AG took up a stake in Solandeo and now both companies are working together to help make the energy transition a success.  

And what role does HTGF play in this process? Are you a kind of “matchmaker” or “date doctor”?  

We bring both parties together and place great value on dialogue. Each fund investor is looked after by two experienced investment managers who serve as central contact points. Their job is to find companies in the deal flow, portfolio or indeed on the market that match the search criteria of the fund investors. This often takes place at our regularly held events such as the HTGF Family Day or the HTGF Partnering Days. In many cases, the two parties would never have found each other without our help. Start-ups and larger companies often speak different languages. It can therefore be helpful when you have someone to act as an “interpreter”. 

In some instances, neither side needs an interpreter. The two parties might be such a good match that the investor fully acquires the start-up there and then.  

Yes, this has happened on eleven occasions in the past – most recently with JeNaCell. This was a biotech company that had developed a nature-identical material to treat wounds and burns in the field of dermatology and medical technology. In 2012, HTGF became one of the first seed investors in the company. Specialty chemicals company Evonik invested in JeNaCell in 2015 through its venture capital arm and is now integrating the firm’s portfolio into its own healthcare business. This is a great example of how we also help fund investors and start-ups to work together in the long term.  

If I’ve understood it correctly, a hallmark of these collaborations is that both companies learn from each other. 

This simply has to be the case, as our efforts should clearly lead to a win–win situation. The large company knows a thing or two – and the same applies to the smaller company. The two companies establish a dialogue and share their expertise with each other. One plus one often doesn’t make three, but five – we see quite significant synergies on a regular basis. What’s important to remember is that collaborations are only successful in the long run if both parties benefit. Again I’d stress here that while it is of course important that the High-Tech Gründerfonds portfolio shows good development, it is just as important that we support our fund investors in achieving their goals. We’re enjoying success on both these fronts. 

Has the start-up scene in Germany changed at all over the last decade?  

I think so. We’re seeing a lot of experienced founders reappearing on the scene. This never really happened before. The whole scene is also much more mature. The young business leaders are fitter, better and more professional. They know exactly what they want to do. And I’m also especially pleased to see that many entrepreneurs are more ambitious and setting the bar high.  

And High-Tech Gründerfonds helps them to achieve their objectives? 

Absolutely. We understand the special challenges that entrepreneurs face and understand their needs. In addition to flexible financing, we offer start-ups crucial benefits that are tailored to their individual situations. We primarily act as a strategic springboard for both our portfolio companies and our fund investors.  For our fund investors, we are the platform that offers access to start-ups and, in turn, the innovations of tomorrow – essentially we offer them a glimpse into the future. 

Life Science Pitch Day: Real entrepreneurs, real innovation, real added value

It was a special moment when CureVac founder Ingmar Hoerr shared his business story at the Life Science Pitch Day. More than 30 start-ups, investors, and scientists took part in the event at the end of September, which was organised by High-Tech Gründerfonds (HTGF) together with partners Bayer, Boehringer Ingelheim and the Innovation and Start-Up Center Biotechnology (IZB). We spoke to the event organisers at HTGF: Dr. Caroline Fichtner and Dr. Martin Pfister, both HTGF Principals, touched on the latest trends and talked about the influence that the increase in media reporting has had on the sector during the pandemic as well as the topics that dominated the event.

The Life Science Pitch Day took place at the end of September. What was it all about exactly?

Caroline: Pitch Days take place in various formats. Start-ups can apply to take part, approximately ten of which get the chance to present their business ideas. We then invite investors from the sector as well as HTGF fund investors to attend. This format is not about presenting our own portfolio, which is why we always target companies outside of our portfolio as well as start-ups that do not necessarily need to still be in the seed phase. The Life Science Pitch Day, however, specifically concerns biotech and pharma projects.

What makes your Pitch Day so special?

Martin: Developments in the biotech scene are very wide-ranging. It’s important that investors and young development teams are able to find a good level of communication at an early stage. This is something we can offer at such dedicated events.

Caroline: The field of drug development is very distinctive in its own right and is therefore very particular when it comes to addressing potential investors. It must adhere to long development cycles, strict provisions and specific development sequences. All of this means that the sector is very capital-intensive. Investors therefore have to dive deep into topics and posses the necessary experience.

Do you share the opinion that the life sciences sector as a whole and biotech especially has experienced an additional upswing as a result of the pandemic?

Martin: Definitely. We’re seeing that start-ups in the fields of biotech and pharma have been able to attract high levels of investment in the last couple of years. In Europe too, large financing rounds are commonplace. The pandemic and the subsequent focus on German vaccine manufacturers such as BioNTech and CureVac have obviously brought added attention. We’re now witnessing a shift to topics that have suddenly become more relevant, such as mRNA, gene therapy and antibodies. This has also been reflected in the companies taking part in our Pitch Day.

At the same time, media reporting on the life sciences and biotech has also increased in the last few months.

Caroline: Even before the pandemic, we and many experts were aware that biotech is an innovative field with real entrepreneurs and real successes creating real added value. But public discourse has now shown the public at large how great the potential for innovation in this sector is. Previously, the sector’s image was dominated by the notion of “nerdy” scientists and researchers. The issues being researched were too complex for the public to get a handle on.

Martin: It’s great to see the sector receiving more media coverage. This is something we’ve witnessed first hand with companies from our portfolio. Cardior, for example, is a company researching a treatment against heart failure on the basis of mRNA and which is now receiving increased attention after attracting EUR 64 million in financing. The increased media reporting also provides a greater incentive for others to start up businesses. In addition, you have successful biotech and life sciences entrepreneurs who have been able to sell their companies after presenting patient efficacy data and are now launching new start-ups.

Was there a trend that dominated the Pitch Day?

Caroline: We’re seeing a lot of young companies in the field of oncology, i.e. cancer research. And platform technologies are being further developed. Research is being conducted on technologies that serve as a basis for developing several drugs to combat various diseases, in a similar way to how BioNTech operates. It was also interesting to see a number of companies from the field of genetic research who are working on a type of CRISPR/CAS 2.0, and are thus further developing the genetic scissors – a really exciting platform.

Martin: Another remarkable development this time around was the fact that many of the start-ups had already received funding – often within an academic setting. They had been able to make great progress with their innovations within this framework and are now ready to take them out into the open. This makes their developments more tangible, with projects becoming more exciting as a whole for potential investors.

Were there any companies that particularly stood out for you?

Martin: There truly were a lot of good ideas. With RecTech, for example, we saw an interesting start-up from the field of genetic research that is looking to cure genetic diseases through its work. They develop high-precision genetic scissors, known as designer recombinases, which can correct errors in the genome and which, in contrast to other enzymes such as nucleases, work faultlessly.

Caroline: Another pitch by an as-yet unnamed NewCo was also very intriguing – it’s researching a new Alzheimer’s drug based on small molecules. In contrast to current treatments, this drug would be administered simply as a tablet, and preclinical tests have shown the drug to be effective with fewer side effects. We heard about so many fantastic innovations. It’s great to see what’s going on in the scene.

A special guest at the event was CureVac founder Ingmar Hoerr, who shared his business story. You interviewed him, Martin. What impressed you about him?

Martin: It was a fascinating discussion because he spoke about the early days of CureVac. He also told his own personal story, which – and this is something that’s often underestimated – had a lot to do with adversity and being different. His courage to pursue an untapped, disruptive topic such as mRNA vaccines in the face of much resistance was particularly inspiring for myself and the many entrepreneurs at the event.

So do you have any tips to offer? Beyond the Pitch Days, you work with investors and founders on a day-to-day basis. Is there any advice you’d like to share?

Caroline: I’ll start with the company founders: Make sure to focus! With platform technologies in particular, there’s a danger that you’ll get lost along the way because the opportunities are endless. This is something we experience on a regular basis. Set yourself a clear target and don’t be too swayed by early offers from larger partners. This is something I always advise against.

Martin: I’d also advise company founders to search for a partner that can help you navigate the jungle of options on offer. We touched on it before: the scene is booming and there are a lot of new developments. As a founder, you need an investment partner that you see eye to eye with and that knows what it’s doing. At HTGF, we’ve covered the market for more than 16 years now and have in-depth knowledge of the scene. We have good relations with start-ups and investors and know just how important know-how as well as trust between the individual stakeholders is. This is another reason why we stage events like our Pitch Day – to help create a common foundation for long-term success.

What HTGF can offer its fund investors (besides investments) 

 
Ever since it was established 16 years ago as a public-private partnership, High-Tech Gründerfonds (HTGF) has always worked closely with companies. The third fund alone secured over 30 fund investors, and a fourth fund generation has already been announced. HTGF sees itself as a platform that offers added value for private and public fund investors, portfolio companies and the start-up ecosystem. In this interview, Alex von Frankenberg, the seed investor’s Managing Director, outlines the added value that HTGF offers its private fund investors.

Alex, you’re Europe’s most active seed investor – and you work closely with your fund investors.

We do indeed, but our cooperation extends beyond the investment itself. We want to share our knowledge and experience with our investors, and grant them access to a network we have built up over 16 years. We foster collaboration between business investors and our portfolio companies. We want to strengthen our fund investors’ innovation capabilities, inspire them, connect them, and of course open the door to co-investments or acquisitions.



HTGF fund investor Evonik just recently acquired a portfolio company.

That is a great example to mention, you’re right. The start-up in question is JeNaCell, a company we came across around 11 years ago during a meeting between a panel of judges. And then HTGF was among the first seed investors in the company, back in 2012. JeNaCell is a biotech company that develops nature-identical material that is used in medical technology and dermatology for the treatment of wounds and burns. It’s also used in hydroactive skin care. Evonik had taken up a stake in the start-up back in 2015 via its venture capital arm, and is now in the process of integrating JeNaCell’s portfolio into its health care business. That’s an example of how HTGF also brings together fund investors and start-ups for the long term. Overall, 11 of our portfolio companies have been acquired by our fund investors.



HTGF is a seed investor with a very broad footing. It invests in young companies that are active not only in life sciences and chemicals, such as JeNaCell, but also in the fields of digital and industrial tech.

That’s correct, our investment team is split across these three areas, partly in order to build up specific expertise and form networks. For each of these three areas, decisions are made by an investment committee made up of representatives of our fund investors and experts. An example of a start-up in the life sciences and chemicals category is MYR, the first company to develop a drug to treat Hepatitis D. It was acquired by a US company last year for way over US$1 billion, marking our most successful exit by far. We’ve also seen two highly successful transactions this year, with the IPO of Mister Spex and the sale of Next Kraftwerke to Shell – both of which happened more than ten years after the seed investment.



Can you give an example from the field of industrial tech?

I certainly can. Take our portfolio company R3DT, which has developed a virtual reality tool for industrial engineers. Our fund investor Bosch is already among the licencees. That’s a great illustration of how fund investors and portfolio companies can collaborate. There are numerous examples of this in all areas: FairFleet provides drone services and is cooperating with fund investors such as Bayer and Postbank. And our fitness company eGym helps our fund investors Fraunhofer, EWE and DHL keep their staff fit and healthy.



Tell us about the networks that ultimately lead to collaboration or acquisitions – how do they form?

We place a great deal of importance on communication. At HGTF, each fund investor has two investment managers as central points of contact. Our colleagues in relationship management also establish connections and organise events throughout the whole year. Even during lockdown, we were able to bring together start-ups, investors and companies. Our two most important events are the HTGF Family Day and the HTGF Partnering Days. Networking and inspiration work at all levels here at HTGF.



And what does that mean?

On the one hand, we invite big names from the world of politics and business to give speeches. At the HTPD, we heard speeches from two high-level government officials – German economy minister Peter Altmaier and health minister Jens Spahn – and also from former Deutsche Bahn executive Sabine Jeschke. On the other hand, we also take advantage of conventional networking opportunities. At HTGF, collaborations have been born at the buffet table, or over a beer and a currywurst.



Your network must have reached an impressive size after 16 years.

My colleague Claudia Raber, who is responsible for relationship management, just recently provided the figures in an interview about the added value we offer start-ups: We have around 9,000 different investors in our network, ranging from wealthy private individuals and corporate VCs to German and global VCs as well as private equity companies. And on top of that there are several hundred C-level managers, consultants and mentors who contribute all of their knowledge to our network. 



You said at the start of the interview that you also share your knowledge with your fund investors. What did you mean by that exactly?  

We have concluded more than 600 seed investments, as well as over 1,700 follow-on financing rounds and just under 140 exits. We share the insights we have gained from this experience, and in doing so help companies avoid making investment mistakes. We know what contracts and term sheets need to look like, and our processes always meet the highest standards. And on top of that, we share our specialist expertise in various areas. We’ve got outstanding contacts at leading universities, research institutes and their spin-offs. We know the German start-up landscape like the back of our hand.



In two sentences, what is your message for fund investors who are interested in investing in the fourth fund?

HTGF is a seed investor that leads the way when it comes to new, technological developments. We encourage our fund investors to come and be among the first to discover, support and successfully leverage innovations.

From backpack start-up to platform: The success story of HTGF fund investor FOND OF

To some, FOND OF is simply known as the backpack start-up, but the Cologne company sees itself as a platform for development, unleashing potential and personal growth. So what does that mean exactly? To find out, we asked Dr. Oliver Steinki, founder and Managing Director of the start-up, which is currently one of High-Tech Gründerfonds fund investors. We spoke to him about finding the right work environments, navigating the path to creating the perfect school bag – and why you shouldn’t lock yourself away in a basement to work on innovative ideas.

Oliver, 11 years ago you started out as a young start-up, and created the first ergonomic school bag. And now, you’ve united seven brands under the FOND OF umbrella. You describe yourselves as a platform for development, unleashing potential and growth – can you tell us what that means?

When we started out with FOND OF, our focus was indeed on backpacks. We launched the company 11 years ago with the ‘ergobag’, a successful product for primary school children. Today, like you say, we have seven brands. But there’s so much more to us than backpacks. I’d say that we’ve now become a platform that sparks innovation. Our job is to create a work environment that provides a great deal of inspiration for many people. This then facilitates innovation in other areas.

How did it all start? Had this development been on the cards from day one?

No, it hadn’t. Our company launch was quite normal: Four friends with business degrees who had known each other for years wanted to develop an idea together. We were at a party and one of us came up with the backpack idea. It was an idea that we then rolled with – we worked on sales in the day, product development in the evening, and marketing at night. It was a very intensive time. We did of course make some mistakes, with no consultants or partners at our side. We struggled through and worked tirelessly on the product.

How do you go from making school bags to becoming a platform?

We wanted to create a follow-on product for later school years and thought about calling it Ergomax. But when we presented the name to an 11-year-old girl, it went down like a lead balloon. She said that Ergomax was uncool and told us that she was grown-up and didn’t want a product like that. And at this point it became clear, once again, that our ideas needed to be more target group-specific. At some stage we then started doing more and becoming more diverse. We do things that we find exciting, that we like. And in doing so, we create an environment that fosters individual development. We believe that as soon as you give people free reign, they can develop, and then success in business will follow.

You now run your own logistics centre, you’ve created a modern office environment in the form of The Ship, and you’ve developed xdeck, an accelerator made by entrepreneurs, for entrepreneurs. And on top of that, you’re also a HTGF start-up fund investor. Would you say that all these activities also mirror your platform mindset?

I most certainly would. The goal of a platform is always to promote exchange. For me, this constant exchange is an important way to remain innovative. Ideas often come about by chance – be it through chance encounters, for example, or stories you just happen to hear. All of this can give rise to a new idea and innovation. It’s a similar story when it comes to product development: Locking yourself away in the basement and working on some idea like a madman is not the right way to go about it. If you do that, you’re not going to have any exchange. We never said “This is the perfect school bag” – we just asked 100 mums what they needed. It’s not about being smart, but asking lots of people. 

So you’re saying get out of the basement and hit the street if you’re on the lookout for innovation?

Spot on! But there’s more to it than that. You need to frequently challenge yourself and your own innovation. To be successful, you need to have focus and always be informed. You need partners who know the market inside out. That’s one of the reasons why we’re a HTGF fund investor. We may be a start-up that’s only 11 years old. But in our business, that’s quite a long time. That’s why having a partner like HTGF – a seed investor that’s constantly active on the market, monitors all new trends and sees the big picture – is a smart and important move.

So you’ve now also taken on the role of investor. What do you focus on when it comes to new financing deals?

Three things: The team, innovation, and flexibility. The latter of the three is also related to swift transitions, which is something I just mentioned. The focus of our first business plan was completely different to what we’re actually doing today. Lots of successful start-ups are no longer doing what they initially set out to do. Being able to adapt gives companies a real competitive edge. And when these shifts come at a faster pace, companies also need to be able to respond more swiftly. The pace of change today is faster than it’s ever been. But moving forward, it will never be as slow as this again. And that’s something that all companies have to be prepared for.

Accelerator activities at SAP.iO: “Creating a win-win-win situation”

Alexa Gorman is considered one of the world’s leading experts on start-ups. She began setting up a start-up program at SAP in 2017, and since May this year has been responsible for the software company’s global activities in this area in her role as Senior Vice President and Global Head SAP.iO Foundries and Intrapeneurship. In this interview, she talks about developments in the international start-up scene and SAP’s collaboration with young companies – and also reveals why the company values its cooperation with High-Tech Gründerfonds so highly.

Alexa, you’re in charge of SAP.iO’s global start-up activities. Can you tell us about the latest developments shaping the global market?

Sustainability is clearly a dominant topic at the moment, and there are lots of exciting and promising start-ups out there that are also of great interest to SAP in the B2B segment. Specific examples here include the circular economy and the measurement of CO2 emissions in the supply chain. In addition, the impact on business is becoming greater and greater. Take recommerce for instance. The effects of sustainability and green tech are felt across all industries in all kinds of different forms.

What other trends are there?

We continue to see promising applications in the field of data and analytics. The big question here is how to effectively utilise the large volumes of data that most companies now possess. What role will machine learning play in the long term when it comes to gaining important business insights? These are topics that are also relevant when it comes to end customers.

How do you reflect on the last few months? And how are things looking in terms of innovation capabilities in the B2B segment?

We also sensed the uncertainty that reigned at the onset of the pandemic and thereafter, with many business meetings being cancelled. But once it became evident that this global crisis was set to loom large for some time to come, business picked up again. What then followed was a record number of meetings for our start-ups. Many companies were open for innovation, and this provided a real boost. For our start-ups, especially those active in HR and e-commerce, 2020 was well and truly a record year. In our team, we came to appreciate the benefits of hybrid working. We travel less, have more time and have become even more global – including in the ways we can get start-ups to join our programmes.

You work closely with High-Tech Gründerfonds. How do you benefit from this cooperation?

Our cooperation gives up deep insights into the start-up landscape. The HTGF team is highly active, enjoys a fantastic standing and maintains an extensive network. And that’s something that we can benefit from greatly. Exchanges always take place on an equal footing. We have very lively exchanges, and we work with HTGF when sourcing firms for our programmes. We’ve already been able to welcome a healthy number of start-ups from the HTGF portfolio into our programmes. And in turn, HTGF has also invested in a number of start-ups from SAP.iO programmes. On top of that, we’ve also made a joint investment. It’s a good collaboration between partners that delivers great results.

Tell us about your start-up work at SAP? How did it all start?

We have continuously refined our activities. We overhauled our operations in 2017, and we are concentrating on young companies that offer value for our customers. Our focus is now clearly on start-ups, supporting them on their journey toward becoming SAP partners and thus helping them to scale up their operations. We see start-ups as the next generation of SAP partners and want to offer them a faster way to join this partnership.

So that means that start-ups become partners and suppliers for your customers with the help of SAP.iO?

Yes, that’s the goal. We want to create a win-win-win situation. Young companies gain access to our platform and interfaces and may even receive SAP certification. They also benefit from being able to sell their products on the SAP Store to our more than 450,000 customers from almost all industries. Our customers benefit from innovative start-up solutions that we have taken a close look at here at SAP.iO. And SAP benefits from having a steadily growing ecosystem with lots of innovative partners that complement SAP solutions.

Can you give us a concrete example?

Our goal is to incorporate start-ups into our SAP ecosystem and then ideally integrate them into our sales operation. And as an example of what this can entail, I’ll tell you about BigID, a data and analytics start-up from Israel that now boasts unicorn status. Our partnership with the start-up grew, and its solution is now actively offered in our sales operation. To achieve this level of partnership, a start-up has to get to a certain size and generate a certain level of sales, of course, but it shows that we are able to help young companies grow.

What does the process involve? How do you become an SAP.iO start-up?

The start-ups need to offer B2B solutions. They also have to have secured their first customers and have already completed a financing round. That indicates a certain level of maturity and the potential they have to grow with us. Finding these start-ups and integrating them into our ecosystem – that’s the task of our team here at SAP.iO.

How many innovation hubs, or foundries as they’re called, do you now have around the world?

There are nine worldwide, and each foundry has two programmes a year on certain topics. When selecting start-ups, we draw on the experience of our in-house tech experts, but we also ask our sales team how they view a start-up’s potential. And we even invite customers to screening sessions to hear what they think.

What advice would you give to other companies that are considering working with start-ups more?

Working with start-ups just for marketing reasons is not going to get you anywhere. The most important thing is to clearly define the strategic objective. After all, there’s a difference between seeing start-ups purely as an investment case, using their help to create additional offerings for your own customers, or leveraging start-up support to drive your own company’s digital transformation. They’re all legitimate approaches, but you need to be clear when starting out. First and foremost, working with start-ups should generate value for both sides. Not just for the company, but also for the start-up.