VC capital supports founders on their way to success and often helps them achieve a breakthrough. According to the "State of European Tech Report 2021", Germany already ranks second in Europe after the United Kingdom when it comes to the amount of venture capital invested.
Since 2011, UVC Partners, originally started as UnternehmerTUM Fund, has been investing in early-stage high-tech start-ups – with 255 million euros in the meantime. We talked to Andreas Unseld, who helped set up the fund from the very beginning and is now a partner, about UVC Partners' success story.
You were involved in the founding of the so-called UnternehmerTUM Fund in 2011. What challenges did you face at the beginning?
All in all, it wasn't that easy back then: in 2011, the topic of venture capital was still pretty "dead" in Germany. Due to the dotcom crash about ten years earlier, there was virtually no capital for high-tech start-ups. Back then, we were declared crazy when we came up with the idea of a fund. Of course, it was correspondingly difficult to find investors for the topic. We were only able to start because our CEO, Prof. Dr. Helmut Schönenberger, met the German self-made billionaire Jürgen Großmann at an event at the Technical University of Munich and got him excited about our project. He invested EUR 500,000, which gave us exactly the attention we needed at the beginning. Nevertheless, it took us a good year and a half to reach the first closing with EUR 12.5 million, and another year and a half to reach 25 million. So it was relatively tough at the beginning and at times we even thought that we would stop at 12.5 million.
In the meantime, you have changed your name to UVC Partners. Where are you today?
A lot has happened. After we had successfully allocated the first fund, we launched the second fund in 2017, which was already significantly larger at 82.5 million and for which we had an investment period of three years. This was followed in 2020 by the first closing of our third and current fund, which we were able to close with 212 million euros. A growth fund was also added, which allows us to invest in selected companies from our portfolio in later phases. It currently comprises 43 million euros and is to be increased to 50-60 million. During this time, our team has also grown steadily - from originally three employees to currently 20.
What makes UVC Partners so unique?
I think there are several areas that can be mentioned. In terms of portfolio selection, we focus very strongly on technology-oriented topics that usually bring a certain intrinsic value, e.g. patents or a great existing product. At the same time, we see ourselves as a very proactive fund that helps companies navigate through the very early stages, especially in the deep tech B2B segment, which has been our focus and strength for over a decade. But we are particularly proud of the fact that UnternehmerTUM is a huge asset for us: first, in the deal flow area - because the teams that UnternehmerTUM serves are really great and we invest a lot in them. In addition, we also have UnternehmerTUM's 300+ employees and network behind us, which is a huge advantage.
Which investment are you particularly proud of?
There are many investments that make me proud. Of course, it's great when some companies really go through the roof, like FlixBus, Isar Aerospace or Finn.auto. We also have a broad portfolio that holds a lot of value, even if not all of the companies in it become unicorns. This is extremely important, as it enables us to accomplish very good returns for our investors.
What needs to improve for start-ups in terms of financing in Germany?
We Germans have a habit of only looking at what needs to be improved instead of what is already going very well. I think we should just give ourselves a pat on the back and acknowledge that Germany has developed into an outstanding tech location, in all parameters - and not just Germany, but all of Europe! Ten years ago, the high-tech landscape in this country was still very much extinct and little venture capital was flowing. In the meantime, it has exploded and there are great companies. The "State of European Tech Report 2021" has just revealed that around 100 unicorns were added in Europe last year alone. So everything is already on a really good track. It's also no longer true that the availability of capital in Germany is so poor. On the contrary, there is probably too much capital on the market today. Every good team can get financing. The VC landscape has also become really professionalized in recent years.
I believe that our potential in Germany is far from exhausted. But we have a structural advantage over other countries. Because when we look at where start-up activity is taking place, it is always in livable cities with good universities - whether San Francisco, Palo Alto, London or Paris. What is particularly positive is that Germany is multi-centric and we have 82 major cities here and 17 top-class technical universities and over 300 universities in total, all of which are really good. Therefore, more start-up strongholds will emerge in the future, such as Hamburg for gaming or Stuttgart for automotive and mechanical engineering. UnternehmerTUM and TU Munich were definitely pioneers as a strong team and have also made founding respectable among excellent young people.
What do you want to achieve in the next ten years, where are you headed?
First of all, we have to allocate our current fund well. But I think together with UnternehmerTUM we have the chance to become the leading technology fund in Europe. That's a lofty goal, as there are excellent competitors. But we also see that very good teams deliberately want to join us. So far, we are still strongly focused on the German-speaking region, but we want to put out feelers even further. Experience in the industry shows that investors no longer have to sit directly "next door," and I can well imagine that in the future we will also be able to serve teams in France, for example, who see a relevant market for themselves in Germany. If we can do that in the next ten years, that's really quite a lot. But we will only succeed with UnternehmerTUM, because we see ourselves as an integral part here.
Thank you very much for the interview!
With our series "Making U Count", we use stories, interviews, and photo spreads to show the added value that UnternehmerTUM has created over the past 20 years, which experiences have been most formative, and how they have sharpened our vision.