Munich Startup: What distinguishes BayBG from a traditional private investor?
Peter Pauli: We are an evergreen fund and can support startups over the very long term.
Munich Startup: BayBG, together with Bayern Kapital, has completed the settlement of the so-called ‘Pillar 2' of the Bavarian Corona aid. How has this mammoth task affected your operational work?
Peter Pauli: Pillar 2 expires on June 30th. Together with Bayern Kapital, we reviewed nearly 450 applications and provided over €100 million in financing to approximately 180 startups and smaller medium-sized companies. This task was only possible thanks to the extraordinary commitment of our VC team and resulted in us temporarily having to postpone market development in our own VC business. However, as of June 30th, our focus will once again be firmly on BayBG Venture Capital.
BayBG Managing Director Pauli: “We can make investments of up to 10 million euros per company.”
Munich Startup: In the past financial year, BayBG has Record new investments reported. How did these high investments come about?
Peter Pauli: The consequences of the coronavirus crisis, combined with the technological upheaval—keywords being sustainability and digitalization—are leading to an increased need for venture capital and equity capital among medium-sized companies. Fortunately, investments have also been successful in the VC business—despite the impact of Pillar 2. Our expanded investment focus has certainly contributed to this success; we have recently been able to make investments of up to €10 million per company.
Munich Startup: You have a number of successful Munich-based startups in your portfolio, including Building Radar, Hotelbird, IDnow, Navvis, and Tado. Which sectors will the success stories of the coming years come from?
Peter Pauli: We focus on B2B tech, fintech, digitalization, and medtech, and occasionally invest opportunistically if we can assess the business models well. We expect further success stories from the first three segments in particular.
Munich Startup: When is the moment for you to say goodbye to an investment?
Peter Pauli: There comes a point at which startups can no longer be developed significantly through venture capital alone, and the next step is necessary, such as an IPO or the entry of a strategic investor. Of course, the founders and other invested VCs must also share the view that the time is right for an exit.
Munich Startup: What do you offer your portfolio companies besides the invested capital?
Peter Pauli: We have over 25 years of experience in the venture capital business and bring extensive experience in supporting startups. In addition to our network, our structure as an evergreen fund and our direct access to over 400 medium-sized companies in which BayBG holds investments are real USPs.
Munich Startup: What does a startup have to do to get your attention?
Peter Pauli: In the VC business, we focus on scalable business models from the segments already described. We look forward to engaging with founding teams from this space and are always available via all channels.
