Otto Group: 85 million euros for company-owned startups

Cate­gory: Venture Capi­tal
8. Febru­ary 2018

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.

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