HTGF II delivers strong performance
Evaluation results for High-Tech Gründerfonds II released
Following the call for investors issued by state secretary Matthias Machnig on 6 June for the third fund and the publication of the initial results, the BMWi is now releasing the final evaluation report. The evaluation was designed to assess how successful HTGF has been in meeting its targets.
State secretary Machnig comments: “HTGF has become a quality brand for start-up financing in Germany. It is regarded as a reliable initial investor by numerous private and public investors alike. Interest among foreign investors has also increased substantially. Overseas venture-capital investors had accounted for significantly less than 10% of investments in follow-on financing in 2009, but this figure stood at a third in 2014 and 2015. The public-private partnership model has also proven highly effective, which is why we are looking to continue and further expand the fund.”
Dr. Michael Brandkamp, Managing Director of HTGF, explains: “The evaluation shows that we have achieved our goal of kick-starting the seed-financing market in Germany. Since 2005, the German start-up and investor scene has undergone major positive changes. However, HTGF does not just provide capital, as its primary function is that of a networking catalyst and partner. That is why it is great to see that non-financial aspects are becoming an increasingly important reason for founders to take advantage of the services HTGF has to offer.”
A poll has revealed that portfolio companies especially value the management know-how offered, the sound advice provided by investment managers, and the seed-financing expertise amassed. Overall, they see HTGF as a fair and transparent partner devoid of red tape.
While founders financed by HTGF enjoy major advantages, industrial investors can also benefit from cooperating with HTGF. Industrial partners have also directly provided 30 companies with funds and input. The main advantages enjoyed by fund investors include access to new technologies, innovative business ideas and joint development projects with the start-ups.
Alongside the strategic benefits, a conservative HTGF estimate of the exit potential puts the realistic repayment potential of Fund I at around €270 million. As of 31 December 2015, the total value of the fund, which was launched in 2005, in relation to the capital called stood at 78%. With this in mind, the evaluators believe that HTGF is well on track to clearly exceed its initial return targets.
The evaluators have not only delivered a positive assessment, with them also providing recommendations that will be integrated into the planning stage for HTGF III.
You can read the evaluation report here.
High-Tech Gründerfonds Management GmbH
High-Tech Gründerfonds invests in young, high potential high-tech start-ups. The seed financing provided is designed to enable start-ups to take an idea through prototyping and to market launch. Typically, High-Tech Gründerfonds invests EUR 600,000 in the seed stage, with the potential for up to a total of EUR 2 million per portfolio company in follow-on financing. Investors in this public/private partnership include the Federal Ministry of Economics and Energy, the KfW Banking Group, as well as strategic corporate investors including ALTANA, BASF, Bayer, B. Braun, Robert Bosch, CEWE, Daimler, Deutsche Post DHL, Deutsche Telekom, Evonik, Lanxess, media + more venture Beteiligungs GmbH & Co. KG, METRO, Qiagen, RWE Innogy, SAP, Tengelmann and Carl Zeiss. High-Tech Gründerfonds has about EUR 576 million under management in two funds (EUR 272 million HTGF I, EUR 304 million HTGF II).