Biotop-report 2011

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Surprising Turnaround in VC Financing

The  financing  situation  recovered  astonishingly  fast  in  2010.  Following  a  desolate  prior 

year, there was a marked improvement in industry indicators and in developments in indi-

vidual companies. The regional biotech companies managed to raise more than 100 million 

Euros and two new funds for early stage investment have been established.

The  industry  proved resilient  to  the  financial  and  economic cri-

sis and weathered the turbulences on the private capital markets 

well. There are now signs of a capital market recovery, so that the 

market may be able to meet the continuing high financing needs 

of the biotechnology and medical engineering industry better 

than in the prior year.

According to a survey conducted by Fleischhauer, Hoyer & Partner 

with a panel of 37 leading VC suppliers, investments in Germany 

increased from 341 million Euros in 2009 to 505 million in 2010 

(panellists only). This amounts to a rise by 48 % and meant that 

the pre-crisis level was almost reached again. Most of this capital 

was invested in the biotech (124 million Euros) and medical engi-

neering (80 million) sectors. In terms of the regional distribution 

of these investments, Berlin-Brandenburg came in third position 

after Bavaria and North-Rhine Westphalia. IBB Beteiligungs ge-

sell schaft was again one of the most active investors.

This positive trend was also confirmed by a survey conducted by 

biotechnologie.de  for  the  year  2010.  According  to  the  findings, 

privately held dedicated biotech companies received a total of 

312 million Euros from their investors, which is twice as much as 

in 2009 (142 million). Listed companies collected a total of 335 

million Euros, compared to 122 million in 2009. 

According to research by BioTOP, more than 100 million Euros 

were invested in biotech companies in the Berlin-Brandenburg 

region in 2010. This is a record compared to the preceding period 

and higher even than during the pre-crisis year 2008. With app. 

60 million Euros, listed companies thereby procured the largest 

share of investments by capital increases. Among privately held 

companies, NOXXON AG was the front-runner by a wide margin 

with investments of 33 million Euros. 

In addition to increased private sector investments, the indus-

try  also  benefited  from  public-sector  funding  from  the  states 

of Berlin and Brandenburg earmarked for the expansion of the 

infrastructure and new product developments in the amount of 

43 million Euros. In total, some 150 million Euros were there-

fore invested in the regional industry in 2010. Funding also came 

from the German federal government and the European Union, 

which was not examined in detail in our analysis, but is usually 

in the lower tens of million range. 

These very positive results, especially compared to the preceding 

years, should not obscure three factors, however. First: the major-

ity of the financings mentioned benefited only a small number 

of companies. It must consequently be presumed that demand 

for  financing  remains  higher  than  supply  and  that  many  com-

panies  sought,  but  failed  to  obtain  financing. Second: Start-up 

financing is more or less non-existent. This is reflected not only 

in the number and quality of start-ups, but also in the difficul-

ties experienced by enterprises which received pre-seed financ-

ing, e. g. from the federal programmes Go-BIO or EXIST, but now 

have major problems finding start-up financing despite having 

reached an advanced development stage over the years. The High 

Tech Gründerfonds (HTGF) has certainly been the most successful 

instrument for financing technology-focused start-ups for many 

years.  But  not  every  start-up  matches  the  requirement  profile 

of the HTGF, so that many founders have to look elsewhere for 

Federal Funding (BMBF) for R&D projects in biotech companies

Berlin 

14,98

Hamburg 

10,04

Baden-Württemberg 

7,7

Bremen  

7,31

Sachsen-Anhalt 

7,03

Thüringen 

6,29

Bayern 

6,23 

Per capita funding (euro), Figures for 2005-2009, source: ConsulTech GmbH, 2010

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financing.  Third:  Apart  from  the  validation  support  programme 

VIP of the German Federal Ministry of Education and Research 

(BMBF), there is no effective instrument for translating the inno-

vation potentials in academic research at universities into com-

mercial applications. It is therefore to be hoped that VIP will be 

continued and improved in certain respects to become even more 

effective.

New pre-seed and start-up funds have been established in 

 Berlin-Brandenburg which is to create new dynamism in  certain 

areas. Investitionsbank Berlin has set up the Technology Develop-

ment Fund TEF which is to support the development and market-

ing of inventions at the Berlin universities. The aim is to overcome 

the present barriers to utilisation and continued development by 

a clear marketing-oriented focus. The inventions at Berlin’s uni-

versities are managed and supported by ipal GmbH which also 

proposes projects suited for the IBB’s TEF pro-

gramme. In the start-up segment, Peppermint 

has initiated a second venture fund together 

with Stiftung Charité: the Charité Biomedical 

Fund. The Charité Biomedical Fund is an inde-

pendent fund that invests in young companies 

in the health sector which have a first proof of 

concept. The fund focuses on companies in the 

medical engineering and health services seg-

ments, whereby the pharmaceutical segment is 

also considered selectively.

Klaus Lücke

Founder and Managing Director 

of GILUPI GmbH

Funding for the Market Launch of Medical Products for the 

Isolation of Rare Cells from Blood

»

In addition to our technology as a key differentiator, a further strength of 

GILUPI is our good investor team. It makes me very proud that, in addition 

to the ERP Start Fund at KfW Mittelstandsbank, all of our existing investors are 

contributing to the follow-up financing with more than 3.6 million Euros and 

thereby  supporting  our  growth  strategy.  This  financing  round  will  not  only 

enable us to bring to market our first product, the Nanodetector Cancer01, 

but also to create the structure required for future cooperation ventures.

Dr. Joachim Rautter

Managing Director  

Peppermint  Venture Partners GmbH

New Fund for Startups in Biomedicine

»

The Charité Biomedical Fund, which was launched by 

Peppermint Venture Partners GmbH in November 2010, 

provides young companies in the region with a new private 

partner for venture capital financing. With a volume of cur-

rently 25 million Euros, the fund is planning to invest in 

ten to fifteen companies. Investments will focus on medical 

devices, but medical services and the biotechnology sector 

will also be considered. The viability of the technology or 

the business model (proof of concept) is a key investment 

criterion. The new fund is cooperating closely with Charité 

under a cooperation agreement, so that potential spin-offs 

from the Charité and the research facilities cooperating with 

it will be one of the focus areas of Charité Biomedical Fund 

investments. 

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