Why does UPES have a bad reputation

WiWo founder

With a new early-stage fund, the venture capital firm is occupying a segment that many financiers have tended to avoid for a long time.

Intelligent robots, innovative 3D printers, quantum computers, software for process optimization: it is innovations like these that btov Partners is focusing on with its “Industrial Technologies Fund”. As the venture capitalist, which has offices in Berlin, Luxembourg, Munich and St. Gallen, announced today that the search for investors for the new fund is now complete. The hoped-for 100 million euros were raised.

With this, btov's strategy of competing for donors with a comparatively sharp concept has paid off. According to the venture capital firm, the largest single investor was the European Investment Fund (EIF) initiated by the EU Commission and the European Investment Bank. With the NRW Bank and the LfA Förderbank Bayern, two other state donors are on board. Private donors - including industrial companies, family offices, foundations and individual investors - are responsible for the larger share.

Many opportunities to participate

"The widespread interest shows that we are not the only ones who see great, often still untapped potential in this segment," said btov partner Robert Gallenberger in an interview with WirtschaftsWoche founder. Around 1000 investment opportunities per year have been identified in Europe - but few VC companies that occupy the field. "Industrial start-ups completely wrongly have a bad reputation with many financiers."

The prejudice that industry-related start-ups handle capital less efficiently than pure software start-ups or those that target end users is widespread. Because: Hardware in particular drives up the capital requirement during product development. “But this is offset by the fact that marketing budgets are significantly smaller than with B2C start-ups and customer relationships are more stable,” argues Gallenberger. In the long run, investors could even expect a higher return on the money invested.

Growing exit revenues

An indication that the capital market's interest in industrial start-ups is growing is the increasing exit volumes. While the proceeds from sales or IPOs of industry-related start-ups added up to five billion euros between 2010 and 2014, the amount has doubled over the past five years, according to a btov analysis. A total of 191 Exists in Europe in which VC companies were involved were considered.

With numbers like these, btov also wants to attract late-stage investors - a major challenge for the coming years, according to Gallenberger. It is true that more and more international funds are discovering tech companies in Europe for themselves. "But we have to make it clear that the same criteria as for B2C start-ups cannot be used as a basis."

Btov itself wants to invest in individual start-ups in the early phases with one million to three million euros each - with the option of increasing this in later financing rounds. The new fund, which was able to manage 80 million euros in May, has already made five investments. The KIT spin-off HQS Quantum Simulations and the start-up Synfioo, which specializes in supply chain monitoring, are among the investments.