The BayStartUP financing network provided a record sum of €68.2 million in seed and growth capital to startups in 2016. Managing Director Dr. Carsten Rudolph made the official announcement at the 8th Munich Startup Demo Night in Munich's Tonhalle on Thursday evening. WERK1Managing Director Franz Glatz also emphasized the high quality of the Demo Night exhibitors: “Stars are made here!”
Since the establishment of the Bavaria-wide network by BayStartUP In 2014, investment volumes rose steadily: from approximately €25 million (2014) to approximately €38 million (2015), and finally to €68.2 million (2016). The volume nearly doubled in the past year alone. The BayStartUP financing network brings together over 250 listed business angels and over 100 institutional investors, making it one of the largest in Europe.
Impressions from the 8th Munich Startup Demo Night
Capital for further development and internationalization
The average volume of a financing round is €1.26 million. The raised capital allows young companies to build up their technologically sophisticated products, professionalize their sales structures, and take the first steps toward internationalization. Financing rounds are primarily achieved through personal networking and direct startup-investor matching.
Growing interest from private investors
One positive aspect for startup financing is that, in addition to institutional investors, private investors – i.e. business angels and family offices – are becoming increasingly involved. Dr. Carsten Rudolph, Managing Director of BayStartUP, is satisfied:
"In 2016, we finally refuted the widespread assumption in the startup scene that business angels only invest small sums."
Last year, over 45% of the volume brokered (€31.1 million) came from the private sector. The remaining €37.1 million was distributed among institutional, government, and strategic startup investors. Business angels or family offices participated in six out of ten financing rounds. This continues the trend from 2015 and 2014. In the 2015 fiscal year, private investors contributed €12.3 million, or approximately one-third, of the total €37.8 million brokered.
Where private investors were involved, the capital came from a single business angel or family office in 57 of the cases. Up to three private investors participated in 33 of the financings. The individual amounts ranged from €50,000 to eight-figure sums. In many cases, private investors joined forces with the public investors, who are strongly represented in Bavaria, for example Bavaria Capital or the High-Tech Gründerfonds.
Record financing for Tacterion also largely via private investor
The largest single financing in 2016 also came from a private investor and went to a high-tech company in its early stages: Tacterion, a young sensor technology specialist from German Aerospace Center (DLR), secured through direct mediation of BayStartUP an eight-figure financing by the Weiden-based Unger Group. The Tacterion financing is a particularly strong example of Bavaria's startup scene, which includes many high-tech and B2B companies with significant growth potential.
Alexander Becker, who heads the BayStartUP financing network together with Barbara Dombay, says:
"Hardware startups with innovative key technologies like Tacterion face major challenges due to the high investment required. We therefore maintain intensive contacts with investors outside of traditional venture capital channels who are looking for pioneering technologies with entrepreneurial vision."
colleague Barbara Dombay says:
"Entrepreneurs, in particular, shape the diverse private investor scene in Bavaria. For example, traditional SME entrepreneurs from the Bavarian regions come to invest with long-term, strategic interests. Young, successful IT entrepreneurs bring further dynamism to the scene, as they are particularly focused on exits. Furthermore, family offices, which tend to operate with a low profile, are very active in startup financing in Bavaria."
Early qualification for investor search
Within the financing network, BayStartUP exclusively supports particularly fast-growing founders and companies in preparing for investor approaches and through concrete contacts. BayStartUP's Bavarian business plan competitions and numerous workshops, on the other hand, offer an even broader range. The 54 startups currently funded generally utilize the full range of BayStartUP offerings.
