Here a Startup, There a Startup, Everywhere a Startup

In April, we par­tic­i­pated in a trip to Japan with a Thürin­gen del­e­ga­tion and were able to inter­act with the startup com­mu­ni­ties in Osaka and Tokyo, which were impres­sive.  In the last 5–10 years the Japan­ese startup ecosys­tem has exploded in size and greatly improved in qual­ity, as work­ing for a Japan­ese con­glo­morate is no longer seen as the only esteemed career path.  In Japan, as in many parts of the globe, it has become en vogue to found a startup.

This trip to Japan crys­tal­ized our view that the pro­lif­er­a­tion of star­tups (often very sim­i­lar star­tups) around the world has been expo­nen­tial in the last years, notwith­stand­ing the pan­demic and geopo­lit­i­cal wars and con­flicts.  Infor­ma­tion and, even more impor­tantly, ideas are tra­vers­ing the globe at light speed with very lit­tle fric­tion.  This extremely rapid and easy access to new ideas, no mat­ter where they emerge in the world, cre­ates tremen­dous value for human­ity and is spur­ing inno­va­tion on an unprece­dented level.  While this devel­op­ment is awe-inspir­ing, it also means that any idea that can be eas­ily repli­cated will be repli­cated.  Impor­tantly, for star­tups and investors it dra­mat­i­cally increases the pre­mium on inno­va­tions that are truly dif­fi­cult to copy or emulate.

While there can be many forms of pro­tec­tion from this far-reach­ing global com­pe­ti­tion, such as juri­sidic­tional laws (GDPR, for exam­ple) or the need for some prox­im­ity to your cus­tomers, many inno­v­a­tive busi­nesses have eas­ily trans­portable or replic­a­ble inno­va­tions.  For exam­ple, we view many AI-appli­ca­tion-based busi­ness mod­els as being highly-inno­v­a­tive but also sucep­ti­ble to repli­ca­tion or hav­ing their prod­uct become a tool/feature in the large tech plat­forms´ offerings.

In Thürin­gen, we pre­domi­nently have star­tups that pos­sess truly ground­break­ing inno­va­tions that are patentable and pro­tectable to a large degree.  Of course, hav­ing a pro­tected inno­va­tion is just the first step in build­ing a sus­tain­ably suc­cess­ful busi­ness.  How­ever, hav­ing this pro­tectable foun­da­tion gives bm|t the con­fi­dence to invest cap­i­tal and other resources to build the busi­ness, or to fur­ther develop the inno­va­tion to the point where an attrac­tive acquis­tion is likely.

Thürin­gen star­tups often have a hard­ware (phys­i­cal product/technology) base or com­po­nent to their inno­va­tions. And while it is true that the hard­ware seg­ment of the startup world often gets neglected by clas­sic VC investors because “hard­ware is hard”, over the long-term, hard­ware often offers some valu­able pro­tec­tion.  Thus in the longer run, these hard­ware-based mod­els are often not as “hard” as hav­ing a busi­ness that is vul­ner­a­ble to quick mar­ket entry of well-financed com­peti­tors from any­where in the world, as many purely soft­ware-based busi­ness mod­els are.

Essen­tially, for both star­tups and investors, inter­est­ing inno­va­tions them­selves are no longer enough. Inno­va­tions must also be pro­tectable and extremely hard to repli­cate in order to make a startup attrac­tive for invest­ment.  We are for­tu­nate to be invest­ing in Thürin­gen – an inno­va­tion ecosys­tem, which offers mean­ing­ful and pro­tectable inno­va­tions.  Our role as a com­mit­ted investor is to assist Thürin­gen star­tups in trans­form­ing these impres­sive inno­va­tions into valu­able, sus­tain­ably suc­cess­ful companies.

Your bm|t Team

Welcome to the Family

Pee­riot´s aim is to fun­da­men­tally sim­plify IoT net­work­ing and enable inno­v­a­tive appli­ca­tions for intel­li­gent IoT devices that work together in a swarm. The com­pany is devel­op­ing mid­dle­ware that enables IoT devices to exchange their data in a self-orga­nized man­ner, thus cre­at­ing intel­li­gent swarms of devices that work col­lab­o­ra­tively and can effi­ciently solve com­plex tasks together. TGFS Tech­nolo­giegrün­der­fonds Sach­sen and bm|t invested a seven-fig­ure sum in the Saxon-Thuringian deep-tech soft­ware start-up´s seed financ­ing. The invest­ment round was joined by exist­ing investors Thomas Schmidt/be-expo­nen­tial GmbH and Dr. Markus Eisel and is intended to drive the devel­op­ment of inno­v­a­tive solu­tions in the field of IoT net­work­ing.

For fur­ther details on this excit­ing new invest­ment please read this press release:
https://www.bm‑t.de/en/2024-en/tgfs-and-bmt-invest-seven-figure-sum-in-peeriot-gmbh-to-simplify-iot-networking/

Jena-based AOC — Advanced Opti­cal Com­po­nents GmbH (AOC), is a spin-out from Hellma Mate­ri­als and is a lead­ing provider of highly-spe­cial­ized pre­ci­sion opti­cal lenses, pri­mar­ily for the high-power laser indus­try.  AOC has a long and impres­sive his­tory of inno­va­tion dat­ing back to its gen­e­sis within Carl-Zeiss. bm|t, joined by Sparkasse Jena, led this invest­ment, enabling and accom­pa­ny­ing a well-struc­tured man­age­ment buy­out.  AOC´s core cus­tomers also gave strong com­mit­ments, under­ly­ing the impor­tance of the company´s lenses and pro­vid­ing a strong start­ing point as a stand­alone company.

Follow-on Investments

TVM Cap­i­tal Health­care, a spe­cial­ist health­care pri­vate equity firm head­quar­tered in Dubai and Sin­ga­pore, has invested EUR 16 Mio. into Ilme­nau and Munich based neu­ro­care group AG, a lead­ing inno­va­tor in per­son­al­ized men­tal health care, pro­vid­ing solu­tions that empower clin­i­cians to deliver best care to their patients. TVM Cap­i­tal Healthcare’s invest­ment will enable neu­ro­care to exe­cute on its inter­na­tional growth plans, includ­ing expan­sion in the US and mar­ket entry into the King­dom of Saudi Ara­bia, as well as sup­port the devel­op­ment of new hard­ware and soft­ware inno­va­tions. bm|t and other pri­vate investors joined this round with an addi­tional EUR 3 Mio. to bring the total invested cap­i­tal to EUR 19 Mio.

For fur­ther details on this large break­through invest­ment please read this press release:
https://www.bm‑t.de/2024/tvm-capital-healthcare-investiert-16-millionen-eur-in-neurocare/

Garch­ing-based Pre­ci­point GmbH, with its pro­duc­tion in Wilden­spring, Thürin­gen, has been steadily increas­ing sales, and the company´s order pipeline is bur­geon­ing since the Euro­pean and US approval of the company´s highly-inno­v­a­tive iO:M8 dig­i­tal micro­scope and cloud ser­vices for intra-oper­a­tive diag­no­sis dur­ing tumor resec­tions.  This nearly EUR 3 Mio. cap­i­tal raise from pri­vate investors will allow the com­pany to con­tinue on its steep growth path and increase its sales pres­ence inter­na­tion­ally, espe­cially in the US.

Investor Days Thüringen – Recap

This year’s Investor Days Thürin­gen (IDT) was again a smash­ing suc­cess and was even more expan­sive due to the mul­ti­ple loca­tions in Erfurt, with Day 2 tak­ing place in the desert and rain­for­est exhibit at the EGA Park under the mot­tos “Invest­ing Beyond the Crowd” and “Nav­i­gat­ing the Investor Jun­gle”. Over 300 par­tic­i­pants were treated to excel­lent pitches from 36 inno­v­a­tive start-ups and scale-ups dur­ing the two-day event. As always it was won­der­ful to wel­come many new and active par­tic­i­pants to our thriv­ing inno­va­tion invest­ment ecosys­tem here in Thüringen.

THANK YOU to all the spon­sors, pre­sen­ters, atten­dees, and orga­niz­ers for their impor­tant con­tri­bu­tions to this fan­tas­tic event, which has become the pre­mier investor event in mid­dle Ger­many. If you missed this year’s IDT, you can review the event (and what will be await­ing you next year on June 4^th and 5^th) in our 2024 Photo Gallery avail­able on the event site.