It has been quite a first 12 months for German Media Pool Venture Capital (GMPVC), which is celebrating its birthday by taking part in twago’s latest investment round. Euro Serve Media has also contributed to the funding, a total of €2.25 million of cash and media to the growing startup.
GMPVC is the first media-for-equity pooled advertising fund in Germany. Instead of cash, companies are given access to media resources in exchange for an equity stake. In the past, this has usually consisted of one media stream, but GMPVC is unique in Germany as it draws from a pool consisting of television, out-of-home advertising and radio.
Founder and managing partner Dr Niko Waesche told Silicon Allee that the benefit of the pool is greater flexibility compared to traditional media-for-equity partnerships, and it can be more strategic because there is more than one kind of media to draw upon. He said: “In certain situations you might have a problem negotiating other partnership deals somewhere down the line because you’re basically wedded to a single media company. Because we’re kind of an intermediary, we don’t have that problem.”
Online marketplace twago connects clients with freelancers and experts in the fields of IT, design and translation, and will be the sixth investment for GMPVC, which is partnered with media groups Wall Decaux, German news channel N24 and radio group REGIOCAST.
A Wealth of Expertise
A partnership with GMPVC tends to work well for entrepreneurial, high-growth companies that are past the development stage and are ready to scale up the business. For twago, that means access to a ten-week television advertising campaign on N24, as well as a connection to a wealth of expertise in media, investment and entrepreneurship.
The twago platform is available in four languages and with 150,000 experts in 177 countries, it is looking to maintain and even exceed its current growth rate. Founder and CEO Gunnar Berning said: “We grow much faster than our competitors from the US in our core markets and will endeavour to keep this as a trend.” In addition to GMPVC’s media contribution, cash investment from Euro Serve Media will allow twago to develop new products and invest in staff.
Niko added: “Media can’t be alone; it’s not the way to save the world just by itself, but it’s one of the many things that twago can do to basically grow and just scale. Once we get that approach right, I think there’s no limit to how twago can grow.”
One of the problems Niko had originally anticipated with the GMPVC model was whether traditional venture capital funds would accept the value of media resources as capital and be willing to team up. But he has been astounded by how well the partnerships have worked: “The difference that media has is that it is a real marketable good, it always has a price tag. Because we have something that has a price tag, we can do these investment rounds together with venture capitalists.”
GMPVC now has a portfolio of six different investments in a diverse range of high growth Internet companies, a number that Niko is extremely happy with: “Our expectation was that we would like to make five investments in the first year, and we actually have now six investments… We’ve been super happy with the first year, it’s been really exciting.”
Dr. Niko Waesche of GMPVC