innovation – EXCHANGES AND THE REAL ECONOMY

Capital meets entrepreneurial power



Creativity, ideas and courage can be found throughout Germany and Europe. What is largely missing, however, is capital for faster growth. In the US, garage start-ups have evolved into billion-dollar enterprises: a development that Germany has largely missed out on.

As the Cologne Institute for Economic Research pointed out in a policy paper on the topic of start-ups in early 2016: “Highly innovative start-ups that grow to become global companies the size of Google or Amazon within just a few years are not being founded here.”

For innovations to turn into solid businesses in Germany as well, we need more openness towards young enterprises and disruptive innovations from a strong manufacturing industry and from the Mittelstand – Germany’s sector of small and medium-sized enterprises (SMEs) –, which rightly enjoys a great reputation, to open up to young enterprises and disruptive innovations. We need start-up centres at the universities – with young people who know about economic interrelationships and who have the courage to get something started. We also need investors and capital. All of these elements together may create a fruitful ecosystem. At Deutsche Börse, we are actively working on fostering such an ecosystem for growth.

In 2015, we took decisive steps to further develop the pre-IPO growth market, i.e. the market for companies preparing for an exchange listing: Deutsche Börse Venture Network®, our platform for bringing together investors and founders, has mobilised more than €1 billion for funding innovative ideas since its foundation. At the end of September 2016, Würzburg-based va-Q-tec AG was the first Venture Network company to go public (see the photo report “va-Q-tec in Würzburg”). Venture Match is a service that matches offers of capital and financing projects reviewed by our experts. This improves the “hit rate” of investments: it allows companies to focus more strongly on their core business – rather than devoting lots of energy to raising capital. At the same time, transparency is enhanced in this important market, as investors receive better insight into promising companies.

Through our DB1 Ventures subsidiary, established in June 2016, we are constantly looking for attractive investments in the fintech area which suit Deutsche Börse Group’s business portfolio well. We are firmly determined to repeat a success story such as the acquisition of 360T. At the same time, DB1 Ventures has the goal of providing capital to trend-setting companies from our environment – to enable them to develop viable concepts, and to create growth.

With the FinTech Hub, we are looking to bring something of a start-up culture to Frankfurt. The city is home to key regulatory authorities as well as national and international banks.

On 1 March 2017, Deutsche Börse launched Scale, a new exchange segment designed to enhance access to investors and growth capital for SMEs. As a segment of the exchange-based Regulated Unofficial Market, Scale has replaced the Entry Standard for equities and corporate bonds. The target group for the new segment encompasses companies which have already established their track record with investors: admission requirements include cooperation with a Deutsche Börse Capital Market Partner that will verify whether a company is suitable for inclusion into the new segment. This includes a due diligence process during which the company’s legal and financial circumstances are carefully examined and analysed. Admission and post-admission requirements also comprise research reports designed to improve liquidity and enhance transparency for investors. These company analyses are mandatory – and independent, since they are commissioned by Deutsche Börse. Furthermore, companies listed in the segment are subject to the EU Market Abuse Regulation, and are therefore obliged to publish ad-hoc disclosures.

Bit by bit, these elements start to form an ecosystem for growth, whose components support innovative, high-growth companies at every stage of their development. As the leading European market infrastructure provider, Deutsche Börse Group contributes to developing this ecosystem. After all, we want young and growing German and European enterprises to swiftly turn into major businesses, too.

Start-up in focus: va-Q-tec in Würzburg

The company develops and manufactures high-performance vacuum insulation panels as well as thermal packaging which is rented out all over the world. Over the past 15 years, va-Q-tec has re-invented itself multiple times in order to meet its customers’ needs. “In 2016, Deutsche Börse Venture Network provided a major impetus for us,” says founder Joachim Kuhn, who gave us some insight into his company. “We are proud to be the first IPO to have resulted from this growth network.”

Joachim Kuhn, CEO, and Christopher Hoffmann, CFO:

“Development, products, systems and leasing –
we basically do everything the market needs.”

Containers on demand:

“Our containers are very popular.
We hold 80 patents and patent applications altogether.”

Routing slips for containers:

“Everything from works of art and pallets to medication and organs, blood bottles …
Medical transports are currently our main business.”

On the factory floor in Würzburg:

“The special film we use is flexible and efficient to process.”

The vacuum panels consist of porous nano-sized sand covered with a high-tech film.

“We construct a ‘rigid’ vacuum; otherwise,
the panel would collapse immediately.”

Focus on manufacturing:

“Our passive insulation boxes can maintain consistent temperature levels for five days –
without a power supply.”