3 questions to smart minds

The European tech sector is growing five times faster than the rest of the economy

For this 3 questions to Matthieu Baret

Idin­vest Partners
Photo: Matthieu Baret
13. Novem­ber 2019

The number of tech start­ups valued at more than $1 billion has nearly tripled in Europe since 2014. A total of 84 young compa­nies are now among the so-called Unicorns. In the previous year alone, 21 compa­nies joined, inclu­ding three German firms: data analy­tics specia­list Celo­nis, online bank N26 and fashion retailer Abou­tYou. (Source: Report by GP Bull­hound, a consul­ting firm specia­li­zing in tech­no­logy invest­ments, acqui­si­ti­ons and mergers, on the growth of Europe’s leading tech­no­logy companies).

For this 3 ques­ti­ons to Matthieu Baret, Mana­ging Part­ner Idin­vest Part­ners for Venture Capital

1. Idin­vest Part­ners was previously known in Germany more for private debt invest­ments. You have now closed your “Digi­tal Fund III” at 350 million euros. Can you describe your venture capi­tal acti­vi­ties in more detail?

In fact, our roots are in private equity with a clear focus on venture capi­tal. That’s how we star­ted in 1997, and venture capi­tal has always been at the core of our DNA. “It was only” ten years after our foun­ding that we estab­lished the private debt busi­ness and later the private funds busi­ness (funds of funds and secon­da­ries). Today, we manage €2.9 billion in venture and growth capi­tal, making us one of the leading VC funds in Europe. In total, we have more than 80 compa­nies in our port­fo­lio in this area. We invest in parti­cu­lar in compa­nies in the digi­tal economy, the smart cities sector and digi­tal health.

We are proud to be part of some of Europe’s great success stories as a finan­cing part­ner. The French govern­ment recently selec­ted the “Next 40”, the 40 most promi­sing French tech compa­nies, in analogy to the CAC 40. Almost half of them are part of our port­fo­lio. And so far, five compa­nies have made it to the NASDAQ IPO with our support.

2. How attrac­tive is the German market for you?

We have been active in Germany for many years and have made ten invest­ments in the field of venture capi­tal so far, inclu­ding very well-known and successful names such as the e‑scooter rental company Circ, the tele­me­di­cine company Tele­Cli­nic, which offers around-the-clock video and tele­phone consul­ta­ti­ons with specia­lists and primary care physi­ci­ans, and Wefox, one of the leading insurtechs that helps consu­mers manage and opti­mize their insu­rance online. The German market offers very attrac­tive oppor­tu­ni­ties. In terms of all key indi­ca­tors — total venture capi­tal inves­ted, newly crea­ted unicorns and number of exits reali­zed — only the UK is ahead of Germany in Europe.

The German startup ecosys­tem is very dyna­mic and is driven prima­rily by three factors: the quality of the educa­tion system, Germany’s attrac­ti­ve­ness for soft­ware deve­lo­pers from Central and Eastern Europe, and German corpo­ra­ti­ons, many of which actively support start­ups and offer them busi­ness oppor­tu­ni­ties. Germany is home to nume­rous promi­sing compa­nies in promi­sing areas such as soft­ware-as-a-service (SaaS), fintech and digi­tal health. As part of our Europe-wide growth stra­tegy, we are ther­e­fore conti­nuously expan­ding our local team. In addi­tion to our office in Frank­furt, we also have employees in Berlin.

3. How do you find and support your port­fo­lio companies?

We find our invest­ment targets by buil­ding rela­ti­onships with their foun­ders as early as possi­ble. At the begin­ning, there is almost always a close agree­ment on content between us and the entre­pre­neurs. We estab­lish cont­acts and culti­vate rela­ti­onships via the local ecosys­tems, i.e. the networks of foun­ders, busi­ness angels and inves­tors. We select those foun­ding teams that chall­enge the status quo and whose compa­nies have the poten­tial to estab­lish them­sel­ves inter­na­tio­nally and perma­nently as “game chan­gers”. The women and men we support are coura­ge­ous, pursue a clear vision and are deter­mi­ned to realize their ideas under any circumstances.

We see oursel­ves as their stra­te­gic part­ners and help our more than 300 port­fo­lio compa­nies by connec­ting them with poten­tial custo­mers and part­ners or, in the case of recrui­ting, with talent from our network. Last but not least, we give them access to our exten­sive network, for exam­ple if they want to expand outside Europe. With our presence in nine count­ries — inclu­ding the USA, Brazil, China and Korea — we can offer them many opportunities.

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