The VC firm Mountain Alliance is involved in 33 European scale-ups in the digital economy, including in particular e-health, new work and digital education. In the ten years of its existence, the venture capitalist has recorded several exits, such as the Munich-based start-up AlphaPet, which is digitising the pet supplies market, or the platform Internations. However, there are also Munich start-ups in the current portfolio, such as the e-mobility company Qwello based in MTZ. We talked to Daniel Wild, founder and CEO of Mountain Alliance, about current trends, what local start-ups could do better and how European start-ups will be able to compete in the market in the future.
Please introduce Mountain Alliance!
We are a publicly listed operating holding company that invests in German and European growth companies. As a Munich-based company, we also invest heavily in the Munich area.
This is partly because the company was founded here and the team has partly studied here and formed networks from this, but also because we see that valuations in Munich are not yet as maxed out as in Berlin.
Our aim is to offer the scale-ups we invest in more than just financing. As experienced investors and founders, we also want to offer them operational experience and insights. This distinguishes us significantly from purely financial investors.
Mountain Alliance is investing increasingly in health technology and digital education
What do you prefer to invest in?
At Mountain Alliance we only invest in growth companies, not in newly founded companies. Our investment focus is on the German and European digital economy. When we founded Mountain Alliance ten years ago, our focus was solely on e-commerce. Over the years, we have invested in various tech trends, such as fintech or adtech. In the coming years, we will focus primarily on the topics of healthtech, future of work and digital education.
Do personal preferences sometimes influence your investments?
Investments, like all other business relationships, are always a question of personal impressions. Therefore, personal preferences naturally also influence our individual investment decisions. When you invest in a company and accompany it for several years, you simply have to be on the same wavelength and be able to go out for a beer together.
No investment in part-time start-ups
What kind of start-up would you never invest in?
I would never invest in a start-up where the founders are not doing their job full-time, i.e. they are "part-time founders". But that is rather rare in our target group of growth companies. In addition, the founders have to know their way around the market. So I would not invest in a company where the "founder-market fit" is low, because otherwise one simply pays too much "learning money". By the way, it was a bit like that when I founded Getmobile AG: I knew nothing about the mobile phone market.
Do start-ups have to be afraid that you will interfere too much?
No. But the premise is: The better things are going, the less we interfere. Because we are founders ourselves, we may be more operational as investors than others, especially when it comes to majority shareholdings. If necessary, we also assume operational responsibility. Otherwise, we typically have a seat on the advisory board and discuss strategic issues.
I believe that founders should pursue their own vision and that Mountain Alliance can then contribute its expertise. We see ourselves in a position to give more than just financing.
How long does it take from the first contact to the signing of the contract?
Between two and six months.
Tip: Have predictable growth channels
In order to be successful, a startup must be...
...deeply rooted in its market. It should also learn faster than other market players and have a higher rate of development. If a start-up changes or adapts less quickly than the market, it will fall behind. In addition, a start-up must have clearly predictable growth channels. This means that decisive factors such as sales growth are controlled in a targeted manner and do not occur by chance.
What place will European start-ups find in tomorrow's tech world?
The European Union is already stronger in the tech world today than you might think. But it needs to be strengthened even further, and that is exactly where Mountain Alliance is happy to get involved. There are already large European tech companies like Skype or Trivago that show us that it can be done. We believe that there will be more European Unicorns, and that is why we are here. You only have to think of certain sectors of the economy: Europe has one of the largest wine markets in the world, for example!
Europe will have more Unicorns in the future
We always say: "If you can make it in the EU, you can make it anywhere". There are two reasons for this: Firstly, the gigantic but super diverse European internal market and secondly, the strict European laws and regulations in force. But I also see these challenges as an opportunity for European start-ups. Once they have mastered the challenge of the different languages and situations of the European markets and they have managed to comply with the applicable laws, they have almost won. Not only does the single European market open up to them, but the lessons learned in Europe prepare them for global expansion.
Tell us the knockout criterion in the pitch!
If the founders or team members are only full-time committed when the financing is in place. The team must be 100% committed to the project for Mountain Alliance to invest.
Has there been anything that you have made a miscalculation in?
Several things, of course. My biggest disappointment was in online gaming. There is a lot of potential in this market, but some things are also going wrong.
The trend of the year is...!
Due to the impact of Covid-19, this year's trend is - unfortunately - clearly remote working together with B2B and B2C e-learning. This is of course also reflected in Mountain Alliance's investments: Lingoda, movingimage, Tixxt have all received a lot of tailwind in the last few months.
Munich start-ups: There is a need to catch up in marketing
What is the Munich start-up scene doing right from the investors' point of view? What could it do better?
In Munich, I find the deep-tech start-up scene and the many AI start-ups created by the proximity of the university particularly exciting. The numerous partnerships with larger companies are also interesting.
However, the Munich start-up scene clearly has some catching up to do in terms of marketing. Munich start-ups lack "sexyness", especially compared to their colleagues from Berlin. This would of course also increase the valuations and attractiveness for investors...
Last but not least: Who do startups go to when they want to talk to you?
Directly to me by mail.
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