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Smart Money Venture Capital


Steinbeis consultants offer successful support during the series B funding round of a venture studio specializing in the development of basic technology

Innovation is crucial for any company, market, or society to move forward – the very lifeblood of growth and prosperity. And technology is a pivotal part of innovation. For example, emerging technology has the potential to accelerate trading based on machine technology, or open the door to new approaches to value-sharing, or improve access to innovations, developments, and financial services. Next Big Thing (NBT), a venture studio for deep tech companies, is helping to drive the development and commercialization of basic technology, thus supporting the long-term generation of value-added in the economy and society. The Frankfurt-based Steinbeis Consulting Center for Corporate Finance and Investments has owned a stake in NBT since 2018.

The Steinbeis Consulting Center works alongside new and expanding enterprises like NBT by offering smart money, a hybrid approach to providing capital and business development support. NBT is a venture studio from Berlin. Since 2016 it has been working as a co-founder alongside business startups and entrepreneurs to develop ventures in the so-called machine economy. This is an area of industry comprising technology such as the internet of things, artificial intelligence, and distributed ledger solutions. Bringing such forms of technology together raises the curtain on completely new business models, such as models revolving around automated production. The goal is to pool the experience of thought leaders and technology experts in order to drive long-term transformation on behalf of companies, up-and-coming business founders, and investors. Its portfolio currently spans 15 deep tech ventures, from a variety of sectors of industry.

The venture development experts at NBT have developed their own method for using risk capital to set up companies, offering a variety of high-impact solutions to the challenges of the contemporary and future economy. The support they provide to their new B2B companies is based on long-term perspectives, offering development toolkits, innovation strategies, technical know-how, mentoring, and smart funding. Leveraging synergies between venture companies, business partners, and other collaborative stakeholders makes it possible to create an ecosystem for global leaders, tailored to the needs of future markets.

Sustainability – an important aspect of modern investment

The team at the Steinbeis Consulting Center successfully pulled together €19 million for the company in the latest funding round. 90% of capital from this round of funding was sourced through the network of Steinbeis Consultants and their contacts to institutional investors. “For us, but also for the majority of institutional co-investors – such as family offices, foundations, and affluent private individuals – it’s not just important to look at the business model of the new and expanding company; sustainability factors also play an important role,” says Steinbeis Entrepreneur Christian Schulte, explaining the logic behind the investment. According to Schulte, aside from meeting so-called exclusion criteria and a long list of key performance indicators relating to sustainable development, NBT and its portfolio of companies also meet other key criteria with a bearing on innovation and the setting up and establishment of ecosystems.

“For Europe and Germany, it’s quite clear that this currently represents an opportunity to develop new digital basic technologies in the B2B area. American and Asian platform providers have already been working the soil in the areas of e-commerce and most B2C applications,” explains Harald Zapp, founder and CEO of NBT. “The area we really stand to gain in is the up-and-coming machine economy and the classic areas of business to business. Bold and disruptive innovation in this area will ensure that as a business location we will remain at the forefront in Germany in the future – with a clear focus.”

Win-win for investors and capital borrowers

One aspect that is particularly important in this respect is collaboration between NBT and its investors, which is by no means a one-way street or merely restricted to financial commitments on behalf of investors. Many of the institutional funders see strategic benefit in this arrangement. Being able to exchange ideas and work alongside the venture studio allows investors to benefit sustainably and in the long term from know-how and knowledge-sharing within their own companies.

There is another aspect to this, however, since the ongoing profitable expansion of new ventures or business models is only one side of the coin. NBT has a clear area of focus: Their starting point for setting up and establishing companies and platform technology in the long term is Germany and Europe. This also makes it possible to generate long-term economic and societal value from deep-tech innovation in the machine economy.

The Steinbeis experts will continue to collaborate closely with NBT in the future. The Steinbeis Consulting Center is opening its doors to a variety of C-level executives at companies, in addition to offering contacts to institutional co-investors, which also helps the companies in the NBT portfolio with sustainable and long-term expansion.

Sustainable investments continue to grow

Sustainable cash investments and other forms of investment are not just a global phenomenon; significant money flows into this area in Germany. According to a study conducted by the German Forum for Sustainable Cash Investments (FNG), in late 2020 the overall value of investments in these asset classes in Germany amounted to roughly €335 billion. That represents a rise of 25% on the previous year. These investments are not only a reflection of sustainable funds and mandates, but also of sustainably managed client and proprietary investments. 82% of cash flowing into sustainable investments comes from institutional investors. For the financial and investment experts at the Steinbeis Consulting Center for Corporate Finance and Investments, sustainable forms of investment are an important asset category. Every year, a significant number of successfully expanding European B2B companies are also taken over by firms and investors outside Europe. This protects the future interests of companies, but it also poses a challenge for Germany and Europe because this is not just about intellectual property and know-how, but in tangible terms: jobs.