Growth Fund Germany – technological awakening
On the innovation pathway with AI and highly intelligent sensors.
A good six months ago, the Growth Fund Germany had its final closing. With more than EUR 1 billion, it is one of Europe’s largest funds of funds. It invests in venture capital funds which, for their part, finance innovative growth-oriented enterprises. One of them is the Munich-based VC fund Vsquared, which is co-financing the Metzingen-based start-up NEURA Robotics, among others.
Not only do MiPA, MAiRA, LARA and MAV understand the dialect, they also respond in Swabian. Still, they are ‘just’ robots. As remarkable as it is, this ability is, of course, merely a nice add-on. What is much more important is that the nimble, white robots from NEURA Robotics perform not just the most varied tasks in factories, services businesses and households. Thanks to artificial intelligence (AI) and highly intelligent sensors, they can learn and communicate with humans. With these abilities, they unlock almost unimagined opportunities and, among other things, important potentials in the fight against growing skills shortfalls in Germany.
David Reger launched the start-up in the Swabian town of Metzingen in 2019. He is not only regarded as a pioneer of what is known as cognitive robotics – machines that are able to learn, even from mistakes. He is deemed a visionary. ‘Cognitive robotics marks the beginning of a new era. Now there are smartphones with arms and legs.’ This opens up endless opportunities for mastering the challenges of modern society. Reger expressly counts the social and private domain among them. ‘A cognitive robot can at least see, hear and touch’, he says. However, this is of little use if it is incapable of recognising mistakes in its actions and responding to changed conditions. Reger also concerns himself with networking between robots, which should also enable them to learn from each other.
Reger hails from Baden-Württemberg and is 36 years old. He worked as a social worker in San Francisco and founded and directed high-tech firms in the automation and robotics industry in Switzerland before the idea to launch NEURA Robotics took shape five years ago. He has long been regarded as a star of the scene and is a sought-after dialogue and interview partner.
Growth Fund Germany
The Growth Fund Germany is a venture capital fund of funds that provides institutional investors with attractive investment opportunities in the Venture Capital asset class. As a fund of funds, it pursues a balanced investment strategy (risk / return).
Read moreInvestors, too, now see enormous potential in the so-called cobots, especially since experts around the world anticipate dramatic rates of growth in market volume – reaching as much as USD 8 billion in the year 2030. Renowned European and German VC funds now focus on NEURA Robotics, including – indirectly – the KfW subsidiary KfW Capital via, among other channels, the Growth Fund Germany, for which KfW Capital operates as an investment adviser. With a volume of one billion euros, it is one of Europe’s largest VC funds of funds and receives two thirds of its funding from private capital. Its investors are insurers, foundations, pension funds and family offices and asset management firms. The Growth Fund Germany, which had its final closing in November 2023, has so far committed EUR 324 million in 20 VC funds.
‘With its volume of around one billion euros, the Growth Fund Germany is one of the largest VC funds of funds ever to be set up in Europe. Its innovative structure is suited to enabling smart interaction between private and public capital. Thus, around two thirds of its volume come from institutional, mostly first-time VC investors’, said Dr Jörg Goschin, co-CEO of KfW Capital with Alexander Thees, referring to companies such as NEURA Robotics in particular.
‘In order to strengthen the financing conditions for start-ups and innovative technology firms and make the sustainable and digital transformation a success, significantly more capital will be required from the private sector – particularly for the high-growth segment. The Growth Fund is an important blueprint for this.’
The start-up in Metzingen is also being co-financed by the Munich-based VC fund Vsquared. The fund managers expressly focus on ‘Deep Tech’, which along with automation, satellite technologies, battery technologies for the energy transition and new computing also includes robotics, according to partner Benedikt von Schoeler. In six funds, Vsquared currently manages around 450 million euros raised from 120 investors, including KfW Capital and the Growth Fund Germany. ‘KfW Capital is an important catalyst for start-up activity in Germany’, said von Schoeler.
‘This also enabled us to take over a Chinese investor’s participation in NEURA Robotics. In this way, we are securing important technologies in Germany, which we believe is key in light of the geopolitical situation.’
However, not just European investors are important for NEURA boss Reger and KfW Capital – strategic decisions by the firm itself are, too. Its managers have just decided to shift production from the Middle Kingdom to Germany before the end of 2024. ‘Despite the high energy prices and other challenges, we are making an upfront commitment by moving our production to demonstrate our confidence in Germany as a business location’, said Reger. This, too, is sure to be very much in the interest of Goschin and von Schoeler. In 2024, NEURA Robotics intends to invest 50 million euros with around 230 employees from 30 countries and consolidate its long-term growth path all the way to Reger’s planned initial public offering of NEURA.
Published on KfW Stories on 4 June 2024.
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