Bildnachweis: aws Fondsmanagement GmbH.
Capital availability for start-ups has also declined in Austria, both for larger rounds and in early stages. The new aws Gründungsfonds II is intended to remedy the situation.
VC Magazin: You recently announced the launch of the aws Gründungsfonds II, with a volume of over EUR 70 million. How urgently does Austria’s start-up scene need the capital in these difficult times?
Haimberger: Austria’s start-up scene is facing a significant lack of venture capital, with a deficit of around 2.3 times compared to the EU average. The need for capital in Austria is particularly urgent in these difficult times. Our new venture capital fund is just the beginning of our efforts to bridge the gap and bring our venture capital market closer to countries like Germany that are better capitalized. We address the funding gap by inviting co-investors to join us in investing at attractive valuation levels, which is a natural consequence of undercapitalized markets. This approach has enabled us to build a diverse co-investor network spanning multiple geographies, industries, and investor types. Through our predecessor fund, we have secured over EUR 500 million in funding for our portfolio companies.
VC Magazin: What is the investment focus of the fund?
Haimberger: Our fund focuses on investing in tech and deeptech start-ups from the late seed to series A stages. Typically, our equity investments start at less than EUR 1 million and can go up to EUR 5 million. We prioritize digital winners and green winners as investment targets. We see the green transition as a tremendous opportunity, with recent studies projecting global annual revenue of USD 12 trillion by 2030 in the green category alone, as highlighted by McKinsey. Austria is uniquely positioned to seize this opportunity, with research and development spending comparable to that of the US, and a customer base ready for green products ahead of the US market. We actively seek out start-ups that originate from Green Austria but have global ambitions.
VC Magazin: As with the predecessor fund, you invest alongside co-investors. What was the experience with the predecessor fund, which investor groups predominated?
Haimberger: We have successfully attracted over 260 co-investors to join our network, each bringing their own unique experiences, and we continue to see growth in our network. Our co-investors encompass various groups, including corporate venture capital firms (CVCs) with deep industry expertise, local venture capital firms, and many venture capitalists from outside Austria. They provide comprehensive coverage for our activities within Austria. We prioritize collaboration and have found that our co-investors recognize the value created through such partnerships. We aim to expand our co-investor network further and are always eager to engage in discussions with potential co-investors.
VC Magazin: Which other co-investors are you targeting, who is on your wish list?
Haimberger: We are actively seeking ABCround investors and those with an interest in tech, deeptech, and a proven track record in green and digital transitions. We also welcome CVCs, as we have gained valuable insights into their specific requirements. Our wish list consists of any investor fitting this profile so long as they approach collaboration seriously and share our fund’s vision.
VC Magazin: Why is it particularly worthwhile for foreign groups and medium-sized companies to consider Austria?
Haimberger: Austria stands out as a global exports champion, specializing in competitive high technology. Last year, six out of ten euros generated in Austria came from exports, totalling around EUR 194 billion in 2022. Austrian founders are known for their global ambitions and growth mindset, as evidenced by recent statistics from the Austrian Startup Monitor, which highlights that start-ups’ export turnover has risen to 40%. Approximately 35% of Austrian start-ups generate more than half of their revenue abroad, and every fifth start-up earns nearly 90% of its income from international markets. Growth-oriented start-ups thrive in Austria, supported by programmes facilitating easy market entry for investors like our venture capital fund and investment philosophy. Many foreign venture capitalists have taken our invitation to explore the Austrian market, engaging in co-investments with us and subsequently expanding their presence based on the knowledge gained.
VC Magazin: Compared to the previous year, the price level has dropped significantly across all countries. What is your assessment of the current price level for Austrian start-ups?
Haimberger: Overall, start-up valuations have experienced a decline, similar to other countries. However, it is important to note that start-up pricing is less influenced by macroeconomics and more dependent on the actual traction and performance of the underlying business. Start-ups are accustomed to operating in dynamic markets, both positive and negative. We can provide ongoing support to winning teams through follow-on financing and closely monitor operational performance indicators such as growth rates and capital efficiency. Despite the challenging times, some of our portfolio companies are experiencing stronger growth than ever, with monthly growth rates of 20%. The agility of start-ups enables them to drive growth even in difficult circumstances, and certain trend indicators suggest the stabilization of valuations. We believe that the time for new investments is gradually approaching. When combining growth with cost discipline and fair entry valuations, it still yields excellent returns.
VC Magazin: Which technologies and business models do you believe will experience significant value growth?
Haimberger: We see substantial value growth in technologies that facilitate the green and digital transition, particularly those with scalable business models. Our focus often lies within enterprise SaaS (software-as-a-service), analytics, and artificial intelligence, exemplified by our portfolio company Prewave, an enterprise SaaS company specializing in supply chain analytics. We also explore investment opportunities in proptech and have already invested in PlanRadar and other proptech firms. We find sectors that intersect between “green” and “digital” to be particularly attractive. This includes energy efficiency, climatetech, and mobility, among others. Additionally, we see great potential in the food sector within our green category, which led to our investment in Arkeon last year. Recently, Arkeon was recognized as one of the top 50 start-ups to watch in Austria and Switzerland by Sifted.
VC Magazin: Thank you very much.
About the interview partner:
Dr. Christoph Haimberger is Managing Director of aws Fondsmanagement GmbH and responsible for the aws Gründungsfonds I & II and the aws Mittelstandsfonds.
