Attracting Foreign Investors to German Startups at the HTGF Family Day

By David Knight |

It’s often said that German startups need to look beyond their national boundaries in order to find sufficient funding – but increasingly, that process is working the other way around. One recent example of capital being attracted to Germany was last week’s Family Day held in Bonn by the High-Tech Gründerfonds (HTGF), one of the largest events in the country’s seed VC scene.

Attended by around 250 young entrepreneurs and 400 investors, the bilingual two-day event featured pitches, workshops, keynotes from the likes of Irena Goldenberg – partner at Highland Capital Partners – and of course plenty of networking. Founders and investors discussed experiences, ideas, trends and know-how in panels and nearly 800 one-to-one meetings.

HTGF managing director Dr. Michael Brandkamp said: “The interest in high-tech and innovative ideas from Germany is large and growing. Thirteen million out of nearly €40m for follow-on investments in our portfolio came from abroad, largely from the UK, Switzerland, and China. But there is also an increasingly large interest from the US, especially in the life sciences area.”

While the life sciences boom continues across the Atlantic, it remains difficult to convince investors in Germany to fund this space as well as to find the right timing for a financing round. In both expert discussions and his keynote entitled ‘Startups – drivers of innovation in the pharmaceutical industry?’, Dr. Simon Moroney, CEO of publicly-traded company MorphoSys AG, spoke of the highs and lows of running a biotech startup.

The downsides include the long development times and high financing needs in general in the biotech and pharma industries, which mean you not only need to get your strategy spot on, but also find a little bit of luck.

But, together with other experts including head of Bayer’s external innovation technologies Prof. Dr. Stefan Jaroch, it was concluded that the chances of Germany’s biotech and pharma startups are good, something also underlined by the recent involvement of pharma giant Bayer in the HTGF II fund.

The fact that German startups are more attractive to foreign investors than ever before can be seen particularly in the IT and e-commerce spaces, where the largest amounts of funding are raised. For example, HTGF portfolio company Outfittery, a Berlin-based men’s fashion startup, closed a round worth €13m which included Highland Capital at the end of 2013.

But raising lots of money for growth is not the only thing you need to make your startup successful, as CompuNet co-founder Dr. Günther Lamperstorfer argued in his presentation: “The culture of the company is a key factor for the provision of services and therefore for the success of the company in the market.”

Culture and capital together at the Family Day, then, as the German startup scene looks to cement its reputation abroad and bring home the money.