German Bankers Seek to Boost European Tech-Startup Scene

Eyk Henning reported in today’s Wall Street Journal that, “More German bankers are trading ties for T-shirts and trying to boost the country’s struggling tech-startup scene.

“Axel Hoerger spent 20 years rising through Goldman Sachs Group Inc. and UBS Group AG. Last year, he shifted gears and launched a messaging app called Poltergeist.”

The Journal article indicated that, “‘Many of the startups we’re talking with over a potential investment are founded by former bankers and business consultants,’ said Frank Seehaus of German venture-capital firm Acton Capital Partners GmbH. ‘Those people stand out because they know how to present the value drivers of business models.’

“The trend started after the financial crisis. It is picking up speed, as many European leaders are calling for more homegrown tech champions, industry officials said.”

Today’s article pointed out that, “The situation is especially acute in Germany, where venture-capital firms last year invested less than $1 billion in young German companies, according to the country’s private-equity and venture-capital association, BVK. Across Europe, the figure is roughly $15 billion, still dwarfed by the U.S.’s $75.3 billion, according to Dow Jones VentureSource.

Only two German companies are in the Billion Dollar Club of the world’s 50 biggest startups: online fashion retailer Zalando SE and Rocket Internet SE, which itself develops startups.”

Henning added that, “For entrepreneurial bankers, the shortage of new-venture funding is itself an opportunity. Ex-Goldman Sachs banker Toby Triebel in 2014 founded Spotcap, an online credit platform that provides short-term loans to small and midsize enterprises.”

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