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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.

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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.

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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.

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