German publishing giant Axel Springer has teamed up with US startup accelerator Plug and Play Tech Center to encourage digital business ideas.
AIM Group journalist Cristina Costa says venture – in which the partners each hold half the equity – will be based in Berlin and support European innovators and those in the US who want to expand their business there.
Programmes from three to six months include seed investment of 10,000-50,000 Euros (US$13,400-67,000), office space and mentor coaching. Start-ups also have an opportunity to spend part of their incubator programme time at the Plug and Play Tech Center in Silicon Valley.
A ‘demo day’ at the end of the programme enables start-ups to pitch to investors for more capital. Typically, chosen start-ups then assign at least five per cent of their company shares to the Springer/Plug and Play accelerator.
Two founding circles are planned for this year, the first starting on March 15.
Head of Axel Springer’s electronic media division Jens Müffelmann says the initiative sees the publisher broadening its investment horizon “in the context of our digitisation offensive”.
Springer will exploit Plug and Play’s contacts and accelerator experience and combine it with its own network and expertise in Germany and Europe.
“We plan to fund 20 young start-up companies this year,” he says.
Costa says
Axel Springer electronic media chief technology officer Ulrich Schmitz and Saeed Amidi, founder of Plug and Play Tech Center, will take charge of the project. Since its establishment in 2006, Plug & Play Tech Center has invested in more than 1200 start-ups, and has a network of more than 300 tech start-ups and 180 investors. Among its portfolio are PayPal, Dropbox and SoundHound.
Costa says Axel Springer has been enforcing its digital growth strategy by getting closer to the start-up scene recently. Last month it announced an investment in the start-up event Hy Berlin, which brings together companies such as Airbnb and the German start-up scene. It has also been active in start-ups through associated company AS Venture and is reported to be about to invest 50 million Euros sum in Berlin-based company builder Project A Ventures. Among PAV’s portfolio are auto price and product comparison site Toroleo, ‘user intelligence platform’ Semasio and food site Kochzauber.
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