B-to-v holds second close for Industrial Technologies Fund on €80m

The fund was announced in 2017 with a target of €100m and held a first close on €29.5m in March 2018. It has a hard-cap of €125m.

B-to-v partner Robert Gallenberger told Unquote that the firm plans to hold a third and final close around the middle of 2019. It is a 10-year fund with two one-year extensions available.

As with other B-to-V funds, Industrial Technologies Fund is open to leading and co-leading seed, series-A and series-B rounds. Gallenberger told Unquote he believed involvement in early-stage rounds offers much better opportunities and less competition as there are relatively few investors in early-stage industrial technology. Furthermore, the current VC climate (for example, the large number of incubators and accelerators in progress) allows for enough startups to show proof of their success to corporates. This allows funds to increase the quality of the exit without increasing risk.

With this fund, the firm is splitting its strategy to focus on industrial technology and digital technology. The Internet and Mobile Technologies Fund, which closed on €73.80m in 2016, was the fund dedicated to digital technology. Gallenberger told Unquote the firm is in early preparations to open a second digital technology fund.

Arendt & Medernach provided fund structuring advice.

Investors
Funds were raised from industrial corporates, executives and industrial entrepreneurs who have successfully grown their own startups. Gallenberger knows of at least one entrepreneur from a B-to-v portfolio company that has committed to the fund. Industry investors, strategic investors, family offices, foundations, a number of banks, the European Investment Fund, and the management team itself have also committed.

Named investors include LfA Förderbank Bayern, NRW Bank, the European Investment Fund and InnovFin Equity.

Investments
The fund aims to invest in European startups in the industrial technology sector. Examples of the types of technologies to be invested in include AI for industrial process optimisation, so-called Industry 4.0, IIoT (Industrial Internet of Things), cyberphysical security, electronics, power generation and storage, and medical and quantum technologies.

Gallenberger hopes to reduce the number of write-downs dramatically and generate more exits as well as larger exits. B-to-V should be able to realise value from the underlying technology, even if a portfolio company has difficulties with commercialising that technology.

Thus far, the fund has invested in Munich-based DyeMansion, a manufacturer of finishing systems for 3D-printed polymer parts. Gallenberger said the firm also has two other investments that he expects to be completed in March and another two he expects to be completed imminently.

Average initial ticket size from the fund will be €1-3m, with twice that amount for follow on investments.

People
B-to-V – Robert Gallenberger (partner); Christian Reitberger (partner); Christian Schütz (partner); Benedikt Kronberger (partner).

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