Corporate Innovation and Venture Capital – Grownups Meet Startups – High-Tech Gründerfonds Technology Network Conference (HTPC) on 29 January 2019
Established companies are often limited in their ability to innovate. It is not always easy to think in new ways within deep-rooted corporate structures. What is no longer disputed, however, is that innovation is a prerequisite when it comes to safeguarding the future. According to the 2018 Innovation Indicator, in 2012, Germany was one of the top three locations in the world for the sub-indicator economy. By 2018, however, it had fallen to 9th place. Companies are pursuing very different approaches to strengthen their innovative capacity. They are increasingly turning their attention to the world of startups, where different views and ideas are brought together. How both sides can establish a win-win situation as well as how companies can ensure innovation is at the heart of their organisation, are topics discussed at the HTPC on 29 January.
Jens Baumgärtner and Simon Math, both Investment Managers at High-Tech Gründerfonds (HTGF), have already gained a lot of experience in this area. “For many corporates, a partnership with startups is already a decisive component of their digitization strategy – yet not everyone has found the key to optimum cooperation. The ability to innovate comprises many elements,” explains Jens Baumgärtner. Simon Math adds: “That is why we will be focusing on corporate innovation from very different perspectives in our workshop. How can I discover the next major development in my industry at an early stage and, above all, before it is too late? Which processes and organizational structures promote innovation within my company? How can I get the most out of a partnership with startups? And when does such a partnership make sense at all?
Companies that have successfully forged their own paths will provide the impetus for a lively, and probably thought-provoking, discussion. It may be a number of years ago now, but SAP also began as a small high-tech startup back in 1972. Alexa Gorman, SVP, Head of SAP.iO Foundries Europe at SAP, outlines her company’s approach: “We work very closely with startups in very different ways, following an open innovation approach. On the one hand, this enables us to offer our customers additional innovations through startup solutions; on the other hand, we tap into new “intelligent” workflows or solutions that will fundamentally change business processes in the future.”
Like SAP, Stihl is one of 32 limited partners who have invested in HTGF III, High-Tech Gründerfonds’ third fund. Christian Vogt, Chief Digital Officer @STIHL, believes: “Partnering with startups helps corporates innovate faster than the competition, and it helps them more quickly adopt the agile ways of working that startups use. Also, relative to pure corporate venturing, corporate-startup partnerships typically generate impact faster with less capital and less risk.”
Crucial to a successful partnership between startups and corporates is an understanding of each other’s interests and a willingness to learn from one another. “Effective purchasing and onboarding processes are essential to establishing startup technologies in companies – the slower a company acts, the more likely it is that the most promising project will get lost within a labyrinth of bureaucracy,” says Hartmut Hahn, founder and CEO of Userlane. Userlane’s technology is now used by numerous DAX and Fortune 500 companies.
It is not just corporates that benefit from the opportunity to strengthen their innovative capacity through a partnership with startups, as medium-sized companies in particular stand to gain an innovative boost through cooperation with venture capital funds. “Many SMEs are global leaders in their niche markets and produce excellent innovations. However, it is sometimes difficult for them to come up with fundamental innovations that lead to new business models,” explains Michael Brandkamp, Managing Partner of High-Tech Gründerfonds. “In order to remain competitive in the long term, SMEs are also in urgent need of external impulses. Cooperation with startups is a promising opportunity here, but one that has unfortunately yet to have been sufficiently exploited,” Brandkamp adds.
About High-Tech Gründerfonds
High-Tech Gründerfonds (HTGF) is a seed investor that finances high-potential, tech-driven startups. With EUR 892.5 million in total investment volume across three funds and an international network of partners, HTGF has already helped forge more than 500 startups since 2005. Driven by their expertise, entrepreneurial spirit and passion, its team of experienced investment managers and startup experts help guide the development of young companies. HTGF’s focus is on high-tech startups in a range of sectors, including software, media, internet, hardware, automation, health care, chemicals and life sciences.
To date, external investors have injected over EUR 2 billion into the HTGF portfolio via about 1,400 follow-on financing rounds. HTGF has also successfully sold interests in more than 100 companies. Investors in this public-private partnership include the Federal Ministry For Economic Affairs and Energy, the KfW Banking Group, and Fraunhofer-Gesellschaft e.V., as well as the companies ALTANA, BASF, BAYER, B.Braun, Boehringer Ingelheim, Robert Bosch, BÜFA, CEWE, Deutsche Post DHL, Dräger, Drillisch AG, EVONIK, EWE AG, Haniel, Hettich, Knauf, Körber, LANXESS, media + more venture Beteiligungs GmbH & Co. KG, PHOENIX CONTACT, Postbank, QIAGEN, RWE Generation SE, SAP, Schufa, Schwarz Gruppe, STIHL, Thüga, Vector Informatik, WACKER and Wilh. Werhahn KG.