To strengthen Hamburg’s position as a hub for innovative start-ups, the EU-funded Innovation Starter Fund has, to date, invested over EUR 4 million in 10 different companies.
Innovation fund promotes Hamburg’s start-up scene
- 13 March 2019
Through the Innovation Starter Fund Hamburg, which provides venture capital to young and innovative companies with their place of business in Hamburg, we are helping to strengthen the innovation activities of the city.
Hamburg is one Germany’s hottest hubs for start-ups. According to a recent survey by Kreditanstalt für Wiederaufbau, the city has 253 start-ups per every 10 000 inhabitants – giving it a slight edge over Berlin. This success is the result of a dedicated strategy by city officials to attract entrepreneurs and potential founders through events, business centres, and funding opportunities.
One of those opportunities is the EU-funded Innovation Starter Fund. An initiative of the Ministry of Economy, Transport and Innovation of the Free and Hanseatic City of Hamburg, the fund aims to strengthen the city’s start-up scene and, in doing so, build the promising companies and employers of the future. As Hamburg’s most active early-stage investor, the fund invests venture capital of up to a maximum of EUR 1 million in qualifying companies.
The total volume of the fund is EUR 12 million and the money is provided in equal parts by the City of Hamburg and the European Regional Development Fund.
The application process
To qualify for funding, the applicant must be a (private) limited company (GmbH, AG or UG) headquartered in Hamburg and be no more than five years old. The fund is only available to small businesses as defined by the European Commission. Although the fund is not limited to any particular industry or sector, the applicant must present an innovative business idea.
Those companies considered to have potential are invited to a personal meeting to further pitch their business idea. If the fund’s management team is convinced, and following a thorough due-diligence process, companies are invited back to pitch to the entire fund committee. In making their decision, the committee looks for: significant growth aspirations, an experienced management team, strong selling points, a convincing customer benefit, attractive market potential and a clear exit plan. For those lucky companies that succeed here, contracts will be drawn up.
In addition to funding, the fund provides ongoing support in operational and strategic matters and the acquisition of financing in a sale or initial public offering.
Start-up success stories
As of early 2019, the fund has invested over EUR 4 million in 10 companies. One of these companies is Resourcify, a tech start-up that provides businesses with a neutral cloud platform to easily manage their waste and recycling operations online. The company received EUR 1 million in financing, which will be used to attract new customers, further improve the product, and expand market share.
CEBCON Technologies GmbH, another one of the fund’s many high-tech success stories, recently started developing its second biomass treatment plant. This development was made possible thanks to a six-figure investment round from the fund, and three private business angels.
Total investment and EU funding
Total investment for the project “Innovationsstarter Fonds Hamburg II” (IFH II) is EUR 12 000 000, with the EU’s European Regional Development Fund contributing EUR 6 000 000 through the Hamburg ERDF Operational Programme for the 2014-2020 programming period. The investment falls under the objective “investment for growth and jobs”.