The year in review – 2023
As the year draws to an end, we sat down for a chat with the High-Tech Gründerfonds (HTGF) management team. Read on to find out what Romy Schnelle, Alex von Frankenberg and Guido Schlitzer had to say about how HTGF fared in 2023, which trends are becoming important, and what will really count for start-ups moving forward.
What would you say were the highlights for HTGF this year?
Alex von Frankenberg: Looking at the figures, 2023 was a good year for us – not only in terms of new investments, but also with respect to exits and follow-on financing deals. We far surpassed our own expectations. For instance, we racked up considerably more than the 40 new investments we had initially envisaged. And we raised the bar even further when it comes to exits: We had projected around five to ten, but managed 12 by the end of the year. On top of that, 2023 was our second-best year for follow-on financing deals since our organisation was founded, with a total volume of over €600 million.
Romy Schnelle: EGYM was one of the companies that secured a major follow-on financing deal, collecting €107 million, with an additional €100 million available for further investments. One of the successful exits we achieved was undoubtedly Emergence Therapeutics, which develops cancer treatments based on antibody-drug conjugates. The partnership they have entered with a global pharmaceutical company will help advance development. Another example would be Wiferion and its wireless charging solution for electric vehicles. It was an important exit involving a well-known US carmaker. We can see just how relevant the technologies in our portfolio are.
Guido Schlitzer: Our new fund also certainly counts as a highlight, with final closing of HTGF IV announced at the start of the year. With a volume of around €500 million, it’s one of the biggest funds to have achieved closing this year in Germany. That sends out an important signal for start-ups.
What was all this success built on?
Romy Schnelle: The depth and breadth of our team’s expertise, without a shadow of doubt. And that’s something we’ve been able to augment this year. We have welcomed new and experienced colleagues who know the dedicated markets and trends and have real expertise. The success we just mentioned and the high level of trust we enjoy on the market are down to the whole team.
Guido Schlitzer: Thanks to our team and expertise, we have already invested in over 700 pioneering start-ups over the years and have built a strong industry network that mainly includes our 45 private fund investors who have invested in HTGF IV alongside the German Federal Ministry for Economic Affairs and Climate Action, and KfW Capital. These investors include market-leading SMEs, corporations, hidden champions and family offices, as well as Fraunhofer-Gesellschaft, one of the world’s leading research institutes.
Alex von Frankenberg: It’s the substance that makes us strong. The substance of our employees, portfolio and investors. It’s a special combination. And for that, I would like to say a big thank you from all three of us – to our team, start-ups, investors and everyone who helped make 2023 such a successful year for HTGF.
HTGF has had three people at the helm since mid-2023. What’s it been like working together as a leadership trio?
Alex von Frankenberg: We’re on a really strong footing. Expanding the leadership team was an important step at the right time. We have a lot more power – and that will certainly come in handy moving forward.
Guido Schlitzer: I completely agree. We work well together as a team. HTGF is growing, and new tasks are arising – not least thanks to HTGF IV, which we mentioned earlier. We are now able to invest more capital per start-up, and we’ve simplified the investment criteria, enabling us to add even more innovative tech companies to the HTGF portfolio.
Romy Schnelle: Standing still is like taking a step back. We frequently evaluate where we stand as we look to advance our development – it’s in our DNA. We’ve taken some important steps, and some of them are clear to see straight away: We moved into a larger office in Berlin and opened a completely new site in Munich. We talk to entrepreneurs early on and drive intensive engagement with the ecosystem. We want to meet future start-up teams at an even earlier stage and are therefore becoming even more active at colleges and universities.
What trends do you see for next year?
Alex von Frankenberg: Artificial intelligence is a topic we’ll see again next year, that’s for sure. It’s one example of many. There’s still a lot of hype around it, and we can see a lot of movement on the market. After all, AI plays a key role in all areas, whether it be industrial tech, digital tech or life sciences and chemicals. We have a huge advantage here in Germany. Our industry and SMEs produce so much data – and this data can provide a really good basis for future AI models.
Guido Schlitzer: We see lots of technologies and business models that can make a major contribution to our economy and society by safeguarding our future and ability to compete. That’s all very encouraging – and it’s exactly what we need to cement Germany’s status as a hub of innovation. Sustainability and impact investing are also big topics that are on the rise. Here at HTGF, we’ve got a really strong footing in the climate tech space.
Romy Schnelle: That’s because for us, it’s more than just a “hot topic” that’s been en vogue for the past few years: we’ve been active – and very successful, might I add – in this area for a great many years. We also have some exciting start-ups in our portfolio today, such as traceless materials. This Hamburg-based start-up, which is developing a sustainable alternative to plastic, completed a Series A financing round worth around €37 million this year.
What message would you like to share with start-ups?
Guido Schlitzer: It will be a tough year economically. That’s why it’ll be the figures and, as Alex said, the quality of business models that really count.
Romy Schnelle: The main task for founders will be to run their companies in a capital-efficient way while keeping them healthy. That’s something that HTGF has a great deal of expertise in, and our colleagues will be helping to make that a reality.
Alex von Frankenberg: And there’s one thing that start-ups and all other teams should bear in mind: We shouldn’t focus too much on the crisis discussions. Politics, economy, energy and start-ups. With innovation cycles becoming faster and faster, the opportunities are soaring. We need to capitalise on them as we look to shape the future of our economy and society.