First of all, thank you very much for taking some time from your busy agenda and giving us the occasion to talk about some aspects relevant for the geo-information sector and venture capital.
• Mr Horn first of all, could you briefly describe us your current responsibilities in your company?
As Managing Partner my responsibilities include mainly investor relations, operations, marketing and advise to start-ups
• What are the differences between a private equity firm and a venture capital firm?
Venture capital is often referred to as a sub-segment of private equity. The difference lies in the target companies. VC is predominantly focused on technology start-ups – especially early stage players like we. Other private equity players also invest in medium sized and large mature companies with succession or turnaround scenarios.
• What’s the idea behind a Venture Capital company?
Provide a financial resource and expertise (“smart capital”) to entrepreneurs – usually by taking a minority share for several years.
• What will the venture capital companies be offering, and doing?
SpaceTec Capital addresses the applications markets in the satellite information business, where information technology meets geo and satellite services like earth observation, navigation, SatCom and geo data.
• From your perspective, how’s the venture activity and opportunity now in Europe within the geo-information sector? In your vision, what are the major trends in the EO industry?
There is a lively start-up activity emerging. These ideas are stimulated by several SatNav clusters, technology transfer initiatives, mass applications like Google Earth and TomTom. Most of the promising new applications brought to our attention represent a some fusion between geo-referenceable content like maps, geo data and images – and navigation.
• What form has your support for geo-information companies has taken?
We work with predominantly early stage start-ups in refining their business ideas, provide our business understanding, technology know-how and international network
• Can you explain why in your opinion companies are looking for new business models support?
Most applications require service elements of very dynamic service models in internet, mobile telephony and content management. Entrepreneurs often lack this know-how because they acquired their expertise in predominantly scientifically or industrially oriented environment.
• What kind of companies in the EO industry might make interesting investments?
We expect to see spin-offs from research institutes or larger companies. Service business models require a entrepreneurial freedom which is difficult to achieve in large hardware oriented firms or scientifically driven institutions.
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• How would you value an investment? How do you make your decisions and why?
Proposals enter a staged review process culminating in detailed due diligences. In early stage financing the key investment criteria are: Quality of management team, innovation, competitive strategy and market understanding, financials and potential exit options for the investor.
• When you evaluate a business plan, what’s the most critical element you look for?
Often the business plans is the key exercise for entrepreneurs to gain clarity about how their idea could find a market. After the investment it becomes an important instrument to guide discussions between the management team and the investors.
• Why do you feel a company want to work at a venture capital firm?
Firstly, desire to grow faster than with own means in very dynamic markets. Secondly, the need for professional support and an international network.
• Would you want to invest in companies geographically spread around Europe?
Yes, our targets are addressing European, if not global market. Our central location in Germany’s VC capital Munich we can get to most regions in in two hours. Still, the German language area is likely to be more heavily represented for proximity reasons.
• At geo-information sector, what investment areas do you find interesting?
The Google Earth /TomTom brought consumer applications into the limelight. We are already looking at commercial and industrial applications, like process automation and risk management
• Let’s take one step further away, what next for the geospatial marketplace? Where do you see the main opportunities for the EO industry in the years to come?
Humanity’s challenges in resource management, population growth and aging, climate change and civil security will create new business needs and require integrated solutions. The earth observation industry’s experience in serving public stakeholders will form a valuable base. Capabilities in integration of geo data content and systems need to be strengthened. Awareness of solving problems with geo-referenced solution will rise.
• There is a lot of interest both within the geospatial technology industry and the consumer side. How do you see this technology connecting and impacting the citizen?
Users who are getting infected with a Google Earth or TomTom virus (in a positive sense) are getting trained to think in geo terms and will naturally demand more geo-related services – just like few people dream back a cable to the cordless phone.
• Where do you see the industry in 5 years?
New technology elements like high resolution satellite imagery and Galileo will gradually get adopted. They will provide another turbo to the today’s service start-ups.
Thank you for your time, and for sharing your thoughts and comments with the EOmag readers.