"We are investing in the next generation of marketplaces"
Styria Digital Marketplaces is the lead investor in the marketplace startup fund Speedinvest X2. This is intended to set accents especially in the area of early-stage business development. Managing director Mike Berger gives deeper insights into the motives for this important step.
Why is it important for Styria Digital Marketplaces to invest in "Speedinvest X2"?
MIKE BERGER: One of the reasons why we now have a portfolio of many market-leading digital marketplaces in Austria, such as willhaben, is that we started early enough and then consistently pushed ahead with the development. And the "Speedinvest X" fund, which specializes in marketplaces, enables us to invest very efficiently in many new ideas or start-ups at the same time. This should help us to identify exciting new potential early on and to develop these fields for us. Because once a market has been occupied by market leaders, it is usually very difficult and expensive to follow.
How does such a fund actually work?
BERGER: Basically it is very simple. Speedinvest X itself consists of a team of marketplace specialists whose task is to filter out the most promising from thousands of marketplace startups. These are then first analyzed in detail, the potential is determined and the founding team is put through its paces. If everything fits, the fund then usually invests in the development of the company over several steps and accompanies or supports the start-up in many areas. Despite all the care taken, many of the startups fail again soon, others develop well and a few become really successful. As a fund with a corresponding portfolio, diversification gives you a good chance that the return on your successful investments will exceed the losses of the other investments. And this has been the case with Speedinvest so far.
And what is Styria Media Group’s motivation to invest in the fund?
BERGER: We do not see Speedinvest primarily as a form of capital investment, but the actual reason for the investment lies somewhere else: According to our marketplace strategy we use Speedinvest to have our ear even closer to the market and the trends in the marketplace area. Our investment gives us a deep insight into the deal flow, i.e. what exciting startups are currently being created and which business models and trends are gaining momentum. One could also say that our fund participation is an investment in market and trend research, which in the best case scenario will refinance itself or even make a profit. In addition, it gives us the opportunity to see exciting startups early on and, if necessary, to participate directly in them if the purchase price is still within reasonable dimensions.
What new marketplaces are emerging out there? What trends do you see?
BERGER: Actually, the journey of digital marketplaces has only just begun. There is a clear trend towards the establishment of business-to-business marketplaces, such as Schüttflix. The company specializes in connecting construction companies with suppliers of building materials and also partly helps manage logistics. This is a billion-euro market in the DACH region, which has so far been completely non-digitized and has great potential for optimization. And there are countless other such examples in the B2B sector that are just waiting to be digitized. Another trend is certainly to be found in the sharing economy and in rental models in general. Trend researchers say, for example, that in a few years, very few people who live in the city will own a car, but will tend to rent one at short notice. So the playing field is huge and it is important for us to bet on the right horse early enough. Speedinvest will be a perfect partner for us in this respect.
Pictures: Mike Berger, Head of Styria Digital Marketplaces (c) ballguide/Pajman