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bm|t newsletter Q1 2020

We strongly believe that the advan­tages of ven­ture cap­i­tal invest­ing (cer­tainly when com­pared to pub­licly-traded invest­ing) become even more appar­ent in times of cri­sis pri­mar­ily because of the explicit longer time hori­zon and the result­ing implicit invest­ment philosophy.

In this Newsletter

Venture Investing in the Time of Corona

An exoge­nous shock, and Covid-19 cer­tainly is a large one, cre­ates a high degree of unfore­seen uncer­tainty for com­pa­nies and investors alike. Invest­ments that are con­tin­u­ously marked to mar­ket show sharp and extreme losses, and investors with poten­tial liq­uid­ity are forced to think about the appear­ances of short-term per­for­mance. These investors often feel com­pelled to make deci­sions regard­ing their invest­ments that are dri­ven by fac­tors that only weeks or months prior played no role in their invest­ment think­ing and may not be related to long-term per­for­mance optimization.

Of course, ven­ture cap­i­tal and pri­vate equity investors must not lull them­selves into think­ing that because their invest­ments have not suf­fered vis­i­ble price declines that there has not been an equal, or greater, value impact on their port­fo­lios. Indeed there has been great value destruc­tion for nearly all com­pa­nies due to this exoge­nous event. Cer­tainly, the vast major­ity of early-stage ven­ture-backed com­pa­nies have less finan­cial cush­ion (on their own bal­ance sheets) to weather longer storms than most pub­licly-traded com­pa­nies. How­ever, it is pre­cisely because ven­ture investors are focused on invest­ments with at least a seven-year time hori­zon (and in many cases much longer), and gen­er­ally have com­mit­ted cap­i­tal to invest, that they are able to main­tain a strong focus on com­pany- and indus­try-spe­cific fac­tors and on cre­at­ing value over the long term.

This long-term invest­ment phi­los­o­phy per­mits a healthy level of calm­ness in the midst of storms, and enables ven­ture investors to make impor­tant and nec­es­sary adjust­ments while main­tain­ing a course designed to profit over years not months.

An extremely crit­i­cal ele­ment for investors to tra­verse crises and to reap the ben­e­fits of long-term invest­ing is hav­ing com­mit­ted fund­ing with­out the risk of lim­ited part­ners (fund investors) reneg­ing on their com­mit­ments. bm|t’s early stage funds (Thüringer Startup Fonds and Thüringer Wach­s­tums­beteili­gung Fonds) are com­prised of 80% fund­ing from the Euro­pean Union and 20% fund­ing from the Free State of Thürin­gen, and are fully com­mit­ted from these strong part­ners from day one of the funds´ existence.

bm|t’s funds do have con­di­tions requir­ing pri­vate co-invest­ment, which does reduce our abil­ity to act alone. How­ever, this con­di­tion has led to the estab­lish­ment of a strong net­work of like-minded pri­vate co-investors that bring addi­tional strength to sup­port our Investee-Part­ners in dif­fi­cult times.

The ben­e­fits of this extremely sta­ble cap­i­tal base and strong co-investor net­work have become starkly appar­ent in this time of cri­sis, as we have gen­er­ally been able to main­tain our funds’ phi­los­o­phy and activ­ity in these chal­leng­ing times. Star­tupdec­tor ranked bm|t’s early stage funds (Stiftung Thüringer Beteili­gungskap­i­tal) as the third most active startup investor in Ger­many for Q1 2020.*

We aim to con­tinue to be a reli­able and trans­par­ent investor for our Investee-Part­ners at all times, but are espe­cially pleased that we have been able to main­tain our role and invest­ment phi­los­o­phy in these dif­fi­cult times.

Wish­ing you health, strength and fore­sight in these try­ing times,
Your bm|t Team

* https://lnkd.in/diYU7eN

Welcome to the Family

Spleen­Lab uses arti­fi­cial intel­li­gence to greatly improve the util­ity of aer­ial vehi­cles. The company´s tagline is: Safe Machine Learn­ing Solu­tions. With drones and city air-taxis as key mar­kets with cur­rent research col­lab­o­ra­tions in place, Spleen­Lab is poised to take off and help aer­ial vehi­cles reach level 5 – full route and flight automa­tion. bm|t led this seven-fig­ure round, and we were joined by another early-stage insti­tu­tional investor, APEX Ven­tures based in Aus­tria, and a busi­ness angel.

rooom AG offers the first com­plete solu­tion for 3D, Aug­mented Real­ity (AR) and Vir­tual Real­ity (VR), with which com­pa­nies and pri­vate indi­vid­u­als can eas­ily and cost-effec­tively cre­ate, edit, and present indi­vid­ual 3D mod­els online. With this award-win­ning solu­tion, for exam­ple, e‑commerce shops can present their prod­ucts in 3D and Aug­mented Real­ity with­out los­ing load­ing time; the real estate indus­try can visu­al­ize real estate con­ve­niently; and muse­ums can archive tem­po­rary exhi­bi­tions and make them per­ma­nently acces­si­ble. Mar­ket demand for rooom´s 3D solu­tions and prod­ucts has increased sub­stan­tially recently as show­rooms have been closed and phys­i­cal pre­sen­ta­tions are no longer pos­si­ble. bm|t led this seven-fig­ure invest­ment round focused on fur­ther devel­op­ing the company´s prod­uct port­fo­lio and grow­ing its sales and cus­tomer ser­vice orga­ni­za­tion, and we were joined by MBG Thürin­gen, Sparkasse Jena-Saale-Hol­z­land and a group of angel investors.

Follow-on Investments

Häcker Automa­tion designs and pro­duces phe­nom­e­nally flex­i­ble machines for „mass-cus­tomized“ pro­duc­tion of elec­tronic com­po­nents and sys­tems. Impres­sively, approx­i­mately 60% of hear­ing aids glob­ally are pro­duced on Häcker Automa­tion machines, which allow for intri­cate and del­i­cate pro­duc­tion work at a minia­tur­iza­tion level that very few com­pa­nies, if any, world­wide can offer. Recently, the com­pany has found strong demand in the high-growth areas of power mod­ules and sil­i­con pho­ton­ics, receiv­ing mul­ti­ple large orders from top com­pa­nies in these spaces. Our seven-fig­ure invest­ment is a growth and liq­uid­ity financ­ing aimed at allow­ing the com­pany to cap­i­tal­ize on its imme­di­ate sales opportunities.

As the num­ber of IT-End­points grows rapidly, it can be extremely dif­fi­cult for IT depart­ments to main­tain an overview of secu­rity, per­for­mance, and avail­abil­ity of all IT assetsEngin­sight´s suite of cyber­se­cu­rity tools works in a well-coor­di­nated man­ner to mon­i­tor all IT-End­points in real time and pre­cisely and suc­cinctly dis­play the results to IT staff. Whether it is servers, desk­tops, lap­tops, tablets, smart­phones, or web­sites, Engin­sight main­tains a con­stant overview of an organization´s IT infra­struc­ture. bm|t led this seven-fig­ure invest­ment round focused on scal­ing up mar­ket­ing and cus­tomer ser­vice, and we were joined by Seed & Speed, HDI Group, and Smart Infra­struc­ture Ventures.

read more ›

Pre­ci­point orig­i­nally used its strengths in optics and elec­tron­ics to develop hard­ness test­ing for mate­ri­als, such as met­als, but after a suc­cess­ful sale of that busi­ness, man­age­ment dis­cov­ered an excit­ing new appli­ca­tion for its exper­tise: dig­i­tal microscopy. Amaz­ingly, today still approx­i­mately 95% of pathol­ogy slide analy­sis is per­formed ana­log – humans peer­ing through the clas­sic micro­scope, mak­ing an eval­u­a­tion, and record­ing the data. Precipoint´s afford­able dig­i­tal micro­scope starts with high-res­o­lu­tion dig­i­tal image cap­ture, which opens many oppor­tu­ni­ties for addi­tional value cre­ation through algo­rith­mic analy­sis and easy data trans­fer, thus break­ing the restric­tions of phys­i­cal loca­tion for, at times life-sav­ing, inter­pre­ta­tion of the data. bm|t led this seven-fig­ure invest­ment and was joined by mul­ti­ple fam­ily offices and busi­ness angels.

The Organ-on-a-Chip mar­ket is red hot, and Dynamic42 has devel­oped many unique tech­nolo­gies to improve the results of stud­ies involv­ing syn­thetic organ sys­tems to test drug tox­i­c­ity and potency by bet­ter mim­ic­k­ing real­is­tic human body con­di­tions. The sav­ings poten­tial for pharma and biotech com­pa­nies to test com­pounds in human-like con­di­tions ear­lier and with sig­nif­i­cantly lower costs is enor­mous. bm|t led this seven-fig­ure invest­ment focused on fur­ther­ing the company´s IP base, the devel­op­ment of addi­tional organ mod­els, as well as the deep­en­ing of projects with large pharma com­pa­nies. We were joined by MBG Thürin­gen and Sparkasse Jena-Saale-Holzland.

read more ›

Jen­et­ric is a bio­met­ric com­pany focused on dig­i­tal fin­ger­print cap­ture. It is the pio­neer and one of few com­pa­nies world­wide able to effec­tively employ TFT tech­nol­ogy for fin­ger­print sens­ing on screens. The company´s core mar­ket is home­land and bor­der secu­rity, and its mobile devices are highly inno­v­a­tive and have opened up many new use cases for mobile fin­ger­print-based secu­rity, such as police forces. Jen­et­ric is also work­ing to bring its tech­nol­ogy to mobile phone screens and sees high poten­tial for greatly improv­ing mobile secu­rity and enhanc­ing fin­ger­print-based func­tion­al­ity on mobile devices. bm|t led this seven-fig­ure financ­ing round and was joined by three busi­ness angels.

ifesca´s intel­li­gent cloud ser­vice and pre­dic­tion and opti­miza­tion engines enable energy com­pa­nies to bet­ter fore­cast demand for elec­tric­ity, gas, or heat in near real time. The gained insights allow energy com­pa­nies to make bet­ter deci­sions regard­ing their own gen­er­a­tion oper­a­tions and/or energy trad­ing, cre­at­ing sub­stan­tial sav­ings for cus­tomers. bm|t led this round focused on grow­ing sales and cus­tomer ser­vice, and we were joined by a group of renowned pri­vate investors with sig­nif­i­cant soft­ware and energy indus­try experience.

Investor Days Thüringen Goes Digital

As it is clearly unad­vis­able to plan phys­i­cal events with many par­tic­i­pants in the near future, we have opted to turn Investor Days Thürin­gen into a dig­i­tal pitch event this year. We will be send­ing more details through our chan­nels in the com­ing weeks, and we hope that you will plan to join us to see an excel­lent cadre of growth com­pa­nies and start-ups present their com­pa­nies and visions.

If your part­ners or col­leagues might be inter­ested in our reg­u­lar updates,
please don’t hes­i­tate to share this link.

ALSO SEE OUR OTHER NEWSLETTERS

Q4 2020 | Jan­u­ary, 22 2021
Q3 2020 | Octo­ber, 20 2020
Q2 2020 | Juli, 17 2020
Q1 2020 | April, 17 2020
Q4 2019 | Jan­u­ary, 15 2020
Q3 2019 | Octo­ber, 17 20019
Q2 2019 | August, 14 2019
Q1 2019 | May, 3 2019
Q4 2018 | Feb­ru­ary, 4 2019
Q3 2018 | Octo­ber, 16 2018
Q2 2018 | July, 23 2018
Q1 2018 | May, 24 2018