IBG balance: Commitment volume rises continuously to 25 million euros per year
Willingmann: "Venture capital is an important growth driver for our economy"
Last year, the state-owned IBG Beteiligungsgesellschaft committed more than 25 million euros in venture capital in the form of investments in start-ups and companies with product and process innovations in Saxony-Anhalt. In the current year, bmp Ventures AG, which has held the IBG management since 2015, has already recorded more than 21 million euros in commitments by September 2019; it is assumed that the very good result of the previous year may even be exceeded. Both are shown in the interim report presented by bmp together with the Minister of Economic Affairs, Prof. Dr. Armin Willingmann, on Monday in Magdeburg.
"Risk capital is an important growth driver for the economy in Saxony-Anhalt," explained Willingmann. "Adequate financing is the basis for every business start-up and growth in the market". The IBG Beteiligungsgesellschaft plays an important and successful role for the state and the economy in several respects. "With its participations IBG contributes to the fact that innovative ideas reach market maturity and new, mostly high-quality jobs are created in Saxony-Anhalt. In addition, since the takeover of IBG management by bmp in 2015, it has been possible to convince start-ups and companies from other federal states to locate in Saxony-Anhalt.
The allocation of venture capital is inevitably associated with an increased risk, as not all innovative ideas and start-ups are successful on the market in the long term. "Usually, a loss rate of up to 30 percent is taken into account. This is particularly acceptable if the other investments develop successfully. This makes it all the more pleasing that IBG has not had to accept a single default on newly acquired investments in the past four years, despite the sharp increase in the volume of commitments. That speaks for the professional bmp management", Willingmann continues.
In this context, Oliver Borrmann, CEO of bmp, emphasizes the importance of a technology-oriented investment focus. "When identifying potential investment opportunities, we focus on good planning and inspiring founding personalities, but above all on the technological focus of the companies. Innovative products and services with unique technological features help not only companies, but also the state of Saxony-Anhalt, to grow sustainably".
The IBG Fund portfolio currently comprises 49 investments in Saxony-Anhalt from all fields of technology, of which 24 investments in companies with around 460 jobs are financed from the RKF III venture capital fund launched at the beginning of 2017.
About the IBG Funds
The IBG funds based in Magdeburg are the venture capital funds of the State of Saxony-Anhalt. The IBG funds provide equity capital to innovative companies with sustainable and above-average growth potential and a registered office in Saxony-Anhalt. At the beginning of 2017, IBG launched the new risk capital fund RKF III with a volume of EUR 84 million. The fund is financed by funds from the state and the European Union and invests in innovative companies in Saxony-Anhalt in the business phases of seed, start-up and growth. The IBG funds are managed by bmp Ventures AG. www.ibg-vc.de
About bmp Ventures
With an experience background of over 250 investments from almost all technology sectors, most of which are in the early stages, bmp is one of the most experienced venture capital investors in Germany. In addition to direct investments, bmp has also managed venture capital funds for KfW Bankengruppe and DEG – Deutsche Investitions- und Entwicklungsgesellschaft. bmp currently manages the IBG funds in Saxony-Anhalt and the Early Phase Fund Brandenburg. bmp has around 20 employees in Berlin and Magdeburg.
More information: www.bmp.com