Düsseldorf It could be the beginning of a great success story: As students in Potsdam, Jerome Lange, Marco Trippler and Lasse Steffen have jointly developed software for large construction sites for two years. This is intended to significantly accelerate construction projects on the basis of data.
This seemed to her professor for IT entrepreneurship at the Hasso Plattner Institute (HPI), Katharina Hölzle, as a promising idea. She accompanied her students as an adviser to the spin-off of her company Koppla and established contact with investors – with success.
Now the venture capital company Earlybird is investing 1.6 million euros in the start-up together with the investor Coparion, as it became known on Thursday. From Christian Nagel’s point of view, this should run much more frequently. “It really is a prime example,” says the founding partner at the venture capital firm Earlybird.
The special thing about it: The Potsdam company is the first to be financed from a special fund for spin-offs. With Uni-X, Earlybird is providing a total of 75 million euros for very young and research-related technology companies that are emerging in the university environment.
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To this end, a network of 45 professors at technical universities across Europe is being set up, who are supposed to be on the lookout for exciting projects almost like talent scouts.
It is difficult to find out whether an idea is really at the cutting edge
In the so-called deep-tech area, it is often difficult to find out whether an idea is really at the cutting edge, says Earlybird partner Frédéric du Bois-Reymond. In addition, the documents that inexperienced founders present here are often not as perfect as venture capitalists are used to.
That could be one reason why investors don’t take a closer look. “We want to work directly with professors to make sure we’re dealing with a really interesting project and we can put more effort into it,” says du Bois-Reymond.
There are three perspectives from which this new fund and the approach of the Munich investor are exciting.
1. Unused innovation potential
In Germany, a large number of patents contrasts with a relatively small number of spin-offs. With its own data analyzes, Earlybird has determined that between 45,000 and 60,000 new technologies and innovations in various deep-tech and high-tech areas are developed every year at Europe’s top universities.
But a company would only be founded by half of these ideas. Of these, in turn, only half also aimed for capitalization. As of today, 75 percent of the innovation potential has been lost, the company concludes.
A study by the management consultancy McKinsey confirms the analysis. “In fact, Germany has deficits when compared to other countries,” says partner Graciana Petersen. It is true that Germany is strong in basic research and has a relatively large number of “world-class patents” to show. Nevertheless, conceptual results are not translated enough into concrete use cases. This is “a missed opportunity for start-ups” that could become successful start-ups valued in the billions.
According to a McKinsey analysis, the USA is better than Germany when it comes to the number of patents per inhabitant. 1.2 times as many world-class patents are registered there as in Germany – an increase of 20 percent. But the difference in entrepreneurial activity in the early phase is much greater: Here, the USA reaches almost 2.3 times the German level.
“We see unbelievable technologies with enormous innovative strength, but much less entrepreneurship than at American universities, for example,” says Philipp Semmer. He is another Earlybird partner behind the new Uni-X fund and is responsible for the investment in Koppla. He hopes: “The professors with an affinity for start-ups in our new network have an overview of the projects of their postdocs and students and also know where an entrepreneurial spirit is blowing.”
McKinsey partner Petersen also examined the areas in which the potential is particularly great: “Measured against the world-class patents for future technology, Germany is well positioned internationally in the areas of automation, materials 2.0 and sustainable energy.”
2. Create clarity with property rights
Many spin-offs in Germany still often fail because of disputes over property rights. If a university or a research institute has applied for a patent, for example, horrific demands can be made on scientific employees who want to build a company on them.
The new Earlybird fund has the potential to set standards here and to enter into negotiations with increasing experience and examples of success.
3. Opportunity for venture capitalists
In the meanwhile very heated competition in the venture capital sector, founding partner Christian Nagel wants to position Earlybird as particularly technology-savvy. In addition to more and more European companies, investors from the USA and Asia have long been competing for the most promising deals. This also applies increasingly to very young companies.
The earlier contact is made with local founders, the better for local investors. Even when it comes to team building, support can still be provided for promising topics, says Philipp Semmer. Solutions could also be sought together, such as how a very strongly scientifically positioned team can be supplemented with commercial expertise.
After the spin-off financing, Earlybird wants to continue using the respective ecosystem of the university – as in the case of Koppla, where Professor Hölzle is now on the advisory board. “The start-up has wonderful employees at the Hasso Plattner Institute, and product development can also continue very well there in the academic environment,” says Philipp Semmer.
The declared goal of Koppla boss Jerome Lange is to bring the concept of lean management to the construction site and to accelerate lengthy large-scale projects. The software is sold to the largest construction company in each case, which obliges all contractors to document their work progress, explains the young entrepreneur.
In this way, connection work could be implemented as quickly as possible. The software is already in use on 25 major construction sites, and he wants to use the fresh venture capital for product development.
More: Start-ups from Europe bring investors higher returns than the competition from Silicon Valley