Otto Group: 85 million euros for company-owned startups
Hamburg — New business models that contribute to corporate knowledge and its development are worth a whopping 85 million to the Otto Group. They are now to be made available for self-foundations in the startup sector. This is intended to strengthen corporate company building through Otto Group Digital Solutions (OGDS), one of the company’s strategic pillars
OGDS will focus on the creation of retail-related startups in order to actively shape the digital future of the Otto Group. Two to three new business models with a focus on logistics, e‑commerce and fintech are to be created each year in the internal company forge.
Since 2012, this model has been an integral part of the digital strategy and successfully implemented by the company builder Liquid Labs; more than ten companies have already been founded since then. This makes the Otto Group a pioneer in the area of company-owned incubators.
“We solve the challenges of digital transformation with the advantages of a startup and the connection to the strategic assets of the Otto Group. This model gives us a clear competitive advantage. Unlike external startups, we can take advantage of the Group structure, still test our ideas quickly and immensely accelerate the growth of our startups,” explains Paul Jozefak (pictured), managing director of Otto Group Digital Solutions and Liquid Labs, in a press release issued by the company yesterday (Tuesday).
“By focusing on our own startups, we are clearly focusing on innovations for our core business rather than on quick returns. With our startups, we are not only driving our own digitization, but also providing the market with digital solutions for the future,” confirms Dr. Rainer Hillebrand, Member of the Group Management Board responsible for Group Strategy, E‑Commerce, Business Intelligence and Deputy Chairman of the Management Board.
Previous OGDS startups include collectAI, an end-to-end digital receivables management provider; RISK IDENT, a service that detects fraudulent activity during online ordering and payment processes in real time; and BorderGuru, a full-service solution for cross-border e‑commerce that is now part of Hermes Group. They have all been able to develop into established players in the free market, offering added value along their value chain to trading and financial companies in particular.
Other startups include Shopping24 Internet Group, a provider of shopping portals and product search engines, Otto Group Media for data-driven advertising, and the two idea labs Liquid Labs and Into‑e.
One advantage for OGDS is that it can use internal Otto Group assets, such as knowledge of customer groups, website reach or logistics infrastructure as strategic leverage to accelerate growth and thereby build market-relevant businesses.