Munich Startup: What does Plug and Play’s daily business look like?
Frederike Rohr: Our CEO and founder, Saeed Amidi, first entered the startup scene in 2008 and was one of the first investors in startups such as Dropbox, Danger, and PayPal. Classic early-stage VC investments are the origins of Plug and Play and remain an important part of our DNA today. We We operate on five continents and are clustered in 18 different industries – from mobility to fintech, health, insurance, logistics and supply chain to food and retail, we are essentially active everywhere, and we make our own investments in all of these industries. This has helped us become the most active early-stage investor in the world, signing about four investments per week. Recent highly successful investments in Germany include N26 and the Munich-based IDNow.
To provide real added value to our portfolio companies and the startup ecosystem, we have also begun building a strong corporate partner network with over 450 partners to date. One of the most well-known programs in Germany was the Axel Springer Plug and Play partnership. Although the program was quite successful, we have evolved our approach with the needs of the market. We are not a traditional Accelerator We don't take equity, and pitch training is only a side service for us. What sets us apart is that we have real business cases from our corporate partners in the respective industries. This means that the corporate divisions come to us looking for a solution to a problem or want support in a specific area. We look for startups that are a perfect fit and connect them with the corporate partners – even before the program starts, so they can be truly certain whether they want to pilot a solution together or not.
Corporate partners should learn from each other
Munich Startup: And that then leads to commercialization.
Frederike Rohr: In the best case scenario, yes. We firmly believe that corporate partners can learn a great deal from each other. The open innovation approach is key to our activities. While companies in the same market are always competitors to some extent, they naturally face the same challenges. We are creating an open platform where they can exchange ideas on these topics and find solutions together with startups. And we want to continually expand this platform. It's all plug and play; with over 30 locations, we are represented everywhere, in all industries.
Munich Startup: How has the coronavirus crisis affected you? You're probably all working from home now, right?
Frederike Rohr: Yes, exactly. For me personally, it's very, very important that we try to maintain a high level of communication, both within the team and with our portfolio startups or corporate partners. This means – and this is very American – we have a so-called 'morning huddle' every morning, where we Munich residents meet at 9 a.m. and briefly update each other. We're now doing the same thing digitally, simply because we think it's very important that we still see each other and don't miss out on the exchange. I've also introduced a 'lunch learning session' where every colleague can talk about any topic for 10 minutes. And whether it's how to make banana bread or mix caipirinhas, we don't want to lose this active, more personal exchange between colleagues. And of course, we also exchange ideas with our portfolio companies, mainly about how we can currently support them. We've also created helpful resources, such as an overview of government stimulus programs around the world, and are holding virtual events to present them to our corporate network. Of course, the extent to which they're impacted also depends on their industry.
'Fireside Chats' with the Plug and Play founder
Munich Startup: And you're now also hosting your events digitally. How does that work for you?
Frederike Rohr: We've taken the opportunity to offer other formats in the context of COVID-19. These include, for example, 'fireside chats' between our CEO Saeed and guests such as the Head of Digital Health Innovation at Roche Diagnostics. These focused on the general situation and the diagnostic kit that Roche has developed. Another guest was the CEO of Webasto – the company is also our partner and made a lot of headlines because it was one of the first companies in Germany to be affected by the coronavirus. This fireside chat was about how the Webasto CEO dealt with this entire situation within his company. The time after the crisis depends on how it develops – but of course we want to be the last to push events with 300 or 400 people traveling internationally to our office. That's why, even after the crisis, our events will probably be smaller or take place virtually for the time being.
Munich Startup: How is Plug and Play organized in Munich?
Frederike Rohr: In Munich We are represented in three verticals: Insurance, Health, and Retail. We originally started with Retail, which has since become the Brand and Retail platform. This is the program that was originally launched as Joint venture with MediaMarktSaturn was founded. Since then, we've gained additional partners such as the Schwarz Group and Visa. Then came Insurance, with partners such as Generali, Achmea, and Versicherungskammer Bayern. And third, Health, originally with the founding partner Roche Diagnostics, and now with Sanofi, Lonza, the Bill and Melinda Gates Foundation, Sana Kliniken, the University Hospital Schleswig-Holstein, Accenture, and Microsoft.
There are, of course, many good overlaps, especially in health and insurance, but also in retail and health, when you think about wearables, for example. In addition, we have a team that focuses on investments and finding the right startups for our corporate partners, and a team that organizes events related to our corporate partners and the Startups organized in the program. And then we have the colleagues who look after our corporate partners and ensure that the platform constantly grows with new corporate partners. This means that our daily business is very, very diverse.
“Much depends on how far the companies are in their innovation process”
Munich Startup: What does the collaboration with the corporate partners look like?
Frederike Rohr: This, of course, varies greatly because what happens depends very much on the partners. In the health sector, for example, we have two partners, Roche and Sanofi, who are very committed. They each have their own teams dedicated solely to Startup Creasphere-Partnerships with whom we work together. These teams are also the internal contacts for departments that are actively looking for a new solution. But not all corporate partners have something comparable – the sometimes complex organizational matrices of large, globally positioned companies mean that we have to help with communication with the startups as well as with the ventures area. Our corporate partners also exchange information with each other via our platform. In general, a lot depends on how far the companies are in their innovation process and what they are looking for. It is very important to us that we can bring the right startups together with the right companies through our programs and events.
Munich Startup: How did it come about that retail, insurance and health came to Munich?
Frederike Rohr: Naturally, we select our locations based on the local industries. Munich is incredibly well-suited for insurance, and also for healthcare, because many pharmaceutical companies and hospital chains are nearby. We choose such locations because we simply know that a lot of industry is happening there. In the retail sector, another factor is, of course, our joint venture partner, MediaMarktSaturn, and they're based in Ingolstadt.
“Munich offers a very strong ecosystem for startups”
Munich Startup: How do you generally see the startup scene in Munich?
Frederike Rohr: In my view, Munich offers a very strong ecosystem for startups. Thanks to its renowned universities, a high-quality talent pool is available to support local startups in scaling up. There are also several excellent innovation centers here that help bright minds turn their ideas into companies. We work closely with them, and they do an excellent job supporting the local ecosystem – for example, our portfolio companies Presize and Cliniserve from the CDTM program the TU and the LMU.
If we look at the traction in recent years, there are many great companies that have been founded locally in Munich, which brings a lot of start-up experience to the city – Konux, Blickfeld and Celonis are just a few prominent examples. And, of course, there are large industrial partners with whom we also work. It's important to remember that supply and demand are also important in the startup world. Thanks to this strong corporate network, a large number of successful B2B companies come from the ecosystem.
When we look at our German portfolio, this strongly supports the thesis that the ecosystem is great for building successful companies – companies like Cliniserve, Celus, Presize, 2trde, IDnow, and i2x are just a few examples. We're always amazed by how many great new startups are being founded in Munich.
In the case of investment, Plug and Play helps with scaling
Munich Startup: How far along does a startup have to be to become relevant to you?
Frederike Rohr: This depends on whether the startup wants to collaborate with our corporate partners or seek early-stage investment. In the former case, it's important for our corporate partners that the startups know what they're doing and have initial successful proofs of concept. Startups must therefore have at least a product or prototype and be able to meet the needs or requirements of our partners' departments. In the case of investment, we are very often the first institutional investor – here, the team and market fit are important to us, and we help the company scale to be ready for corporate partners.
Munich Startup: What are the most interesting startups from Munich that you have come across so far?
Frederike Rohr: Of course, all of our portfolio companies that I mentioned above – Presize is revolutionizing the e-commerce shopping experience with its video-based sizing solution, i2x the quality of customer communication, 2trde the merchant market, Celus the development of electronics, IDNow the ID verification space, and Cliniserve the care market. Furthermore, there are so many interesting early cases in Munich. As I am also the head of our healthcare platform, I am particularly excited about the healthcare startups in Munich. There are so many incredibly interesting companies like Wellabe (formerly Bodylabs, Editor's note), which have developed a mobile laboratory for measuring health data, or DeepCthat use cutting-edge ML learning technologies to unlock big data and solve the toughest challenges in healthcare diagnostics.
Munich Startup: To be successful, a startup must…?
Frederike Rohr: ...be hardworking, have drive, be on your toes, always be open to new developments, and always strive to continuously improve. But the most important thing is to be dynamic and have the right skillsets in your team.
Munich Startup: Who can a startup contact?
Frederike Rohr: So basically to all of us. But for the individual investment programs, these are Caro, she is our retail contact, Fabian is our man for everything related to health and medtech, and for insurance, the Sebastian.
