bm|t newsletter Q3 2018
Welcome to bm|t’s Q3 newsletter at the end of a record-breaking quarter for investment activity. If your partners or colleagues might be interested in our regular updates, please don’t hesitate to share this link.
Wheeling and Dealing
The title of this quarter’s newsletter is not meant in the usual sense of loose transacting. In fact, quite to the contrary. ›Wheeling and dealing‹ just perfectly describes bm|t’s activities in Q3. Wheeling, in the sense that we crisscrossed Thüringen and indeed Germany even more than usual this quarter, working with our valued current investee partners to build successful businesses and identifying and gaining new investee partners. Dealing, in the sense that we closed 14 deals in the quarter, which constitutes a record quarter of investment activity for bm|t. This year, the classic summer lull (Sommerloch) turned into a summer fountain of compelling investments.
We will omit our traditional philosophical investing commentary this quarter, so we can focus your valued attention exclusively on our many important investments of the quarter. We hope you enjoy the quick reads about the companies as much as we did closing the investments!
Welcome to the Family
We made our first ever investment outside of Thüringen this quarter. Our Mittelstandsfonds Thüringen (MFT) allows for a portion of the fund to be invested outside of Thüringen, and we decided to employ this option for a truly exceptional investment. c‑LEcta is a world-leading Leipzig-based enzyme development company, which raised a sizeable investment round in order to complete its evolution from an enzyme research and engineering company to developing and commercializing its own enzyme-based products. We are extremely impressed by the breadth and depth of the management team, the clear vision and direction of the company, and the large potential of the company’s proprietary food and nutritional enhancement products. We could not be more pleased to be a co-investor with Capricorn Venture Partners from Belgium in this very high-potential investment.
Heyfair’s vision is to radically improve the use of hand disinfectant by making the coverage visible to the user and others. The company has strong IP around the addition of a special dye that makes hand disinfectant appear colorfully when applied and subsequently the color completely disappears within two minutes of application. Making the completeness (or lack thereof) of hand disinfectant application visible helps to ensure that medical staff sufficiently disinfect between each encounter with a patient. With the rise of antibiotic-resistant super bugs, it is imperative that medical practitioners have a tool to visibly verify and coerce their actions to minimize the spread of disease in their hospitals and clinics. With this investment from bm|t and multiple experienced business angels with ideal backgrounds to help Heyfair bring its product to market, Heyfair is well on its way to reinventing hand sanitation.
Inter¦cus is a highly innovative designer and manufacturer of traumatology solutions. The traumatology market is attractive, generally carrying even higher gross margins than the orthopedics market, but it is also highly competitive with several large players controlling a significant percentage of the global market. Importantly, over 15 years Inter¦cus has repeatedly proven its ability to develop innovative technologies, which make the company’s products highly demanded by physicians. This investment round is predominantly focused on bringing three new highly innovative and proprietary products to market over the next two years. These products alone have the potential to increase the company’s sales many multiples above current levels. We are extremely pleased to be invested in a proven substantial company that possesses a very attractive near-term pipeline.
Pamyra has built an impressive and efficient booking platform for shipping (spedition) that allows customers to quickly compare options and to book a preferred shipping provider. Using Pamyra saves customers significant time and money and makes incoming orders much easier to triage and process for shipping providers. The company has recently tested multiple sales and marketing channels and the results in terms of customer acquisition costs vs. booking activity and stickiness are very compelling. bm|t joined another institutional investor and several private investors for this investment, which Pamyra will use to further ramp volume on its impressive shipping platform.
In Germany, hospitals are legally required to find placement in a nursing home for patients that are unable to safely return to their home after a hospital stay. The search for an available and appropriate nursing home placement is extremely time intensive for both hospitals and nursing homes. Pflegeplatzmanager has built a user-friendly and easy to operate cloud-based software platform that allows hospitals to see which nursing home beds are available with full details about the care-level of the facilities. Nursing homes can more optimally plan and book their availability and can more easily avoid receiving patients whose care needs differ from the intensity level that they provide. Early results show that Pflegeplatzmanager is reducing the average time required to appropriately match a patient to an appropriate nursing home bed from days to under two hours, and consequently avoiding much frustration for facilities and families and saving the system significant sums of money. With this investment from bm|t, the MBG Thüringen, and an experienced business angel, Pflegeplatzmanager has the resources it needs to focus on rapidly increasing its customer density and create a powerful network effect.
SmartDyeLivery develops functionalized nanoparticles in which therapeutic compounds are enveloped and safely transported to specific organs, which the medicines are targeting. This patented platform delivery technology can be used for a wide range of therapeutic applications and also allows for a unique theranostic use case. Currently the SmartDyeLivery team is focusing on a therapy for sepsis induced liver failure with the goal of reducing the mortality rate of such cases by 90%. With this investment from bm|t and a savvy business angel, SmartDyeLivery is well positioned to take its unique nanotherapy through the next stage of clinical development.
Sixty percent of travel in Germany continues to be booked through physical travel agencies. Despite consumer financing having penetrated most retail verticals, with, for example, nearly every piece of electronic equipment available for financed purchase, the vast majority of travel agencies offer no financing options for customers. Ucandoo has developed a sleek and easily integrated platform for travel agencies to quickly offer consumers financing options for travel. For many consumers, experiences are becoming more valued than material possessions, and we believe Ucandoo is well positioned to be a leading platform for increasing access to travel experiences.
Crowd Architects has developed a software that allows for the tracking of online sales generated by influencer marketing. Currently, there is not sufficient attribution analysis across channels and over time for marketers to properly analyze the effectiveness of influencer campaigns. Crowd Architects’ IROIN product, now allows brands and agencies engaging in influencer marketing to generate a meaningful ROI for influencer spend. bm|t was joined in this round by a group of investors linked to a corporation that is active in the mobile and influencer marketing space, which, in addition to the capital, brings significant market knowledge and experience to Crowd Architects. The company will use the investment to add features to IROIN and advance its market penetration.
FBGS Technologies is a leading developer and supplier of advanced fiber-optic sensing solutions and components based on Fiber Bragg Gratings (FBG) technology. The company’s products offer many modalities of monitoring for a wide range of applications and are currently being used in industries such as medical, aerospace, oil & gas, telecom, and test & measurement. This investment was led by X2 Capital, and bm|t and other current investors participated in the round. FBGS will use the funds to further develop its systems solutions offerings, to expand and automate its sensor manufacturing capacity in Jena, and to build sales operations and channels in key Asian growth regions such as China.
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. The company has recently evolved its line of machines, making them even more scalable and customizable for customers. This development has resonated well in the market and is generating unprecedented demand for Häcker machines, as electronics manufacturers endeavor to find flexible production solutions for ever faster product cycles. Our investment is a classic growth financing aimed at allowing the company to capitalize on its immediate sales opportunities.
MasterPIM has developed a sleek and cloud-based Product Information Management (PIM) software that allows manufactures, traders, retailers, and marketplaces to easily manage complex product information datasets and effortlessly project the processed data into online shops and catalogues. Currently, over 90% of mid-sized manufacturers have no PIM solution, so the market is largely a greenfield opportunity. One of the key reasons that a large portion of the market has not adopted a PIM system despite the increasing demands of sales partners/channels on product data is that traditional PIM solutions are heavy, hosted software with expensive and invasive installations. MasterPIM allows customers to be online with an effective PIM system within hours and at a fraction of the cost of the old PIM systems on the market. This investment round was comprised of current investors, including bm|t, another institutional investor, and a family office, and will allow MasterPIM to expand its sales organization.
oncgnostics’ GynTect test allows women who have tested positive for HPV to quickly gain valuable information regarding the degree of seriousness of their diagnosis. GynTect is able to detect even early stages of DNA methylation that are the first signs of cancer development. Earlier detection of cancer development allows physicians to treat patients sooner, which can often be lifesaving. Additionally and very importantly, most HPV infections resolve without progression to cervical cancer, meaning unnecessary operations, treatments, and mental stress can be prevented if it can be demonstrated that a HPV infection has not caused DNA methylation. This investment round by bm|t and many business angels from the life sciences community follows oncgnostics’ very successful Seedmatch financing at the beginning of this year. oncgnositcs will use the proceeds from both investments for marketing activities and the further development of additional biomarker-based tests for other forms of cancer.
Two of the 14 investments from Q3 2018 have opted to stay in stealth mode for now while they finalize important IP and business activities. We look forward to reporting about these investments in the future.