FLEX Capital investiert in Tech-Pioniere aus dem deutschen Mittelstand

Berlin, March 16, 2020.

FLEX Capital investiert in Tech-Pioniere aus dem deutschen Mittelstand

German SMEs program first-class software, but face structural limits to growth. That is why six entrepreneurs have now launched a fund worth 120 million euros. Their common goal is to use their investments and know-how to help promising software pioneers from German SMEs realize their full potential and thus strengthen Germany as a digital location.

“There are numerous medium-sized Internet and software companies that have developed into true tech champions on their own in recent years. Without a business plan and without venture capital. We want to support these tech pioneers when they reach structural limits to growth. This means that a larger share of tech value creation remains in Germany,” say the two founding managing partners Christoph Jost and Peter Waleczek.

There are 11,000 medium-sized software and Internet companies in Germany

SMEs have always been the backbone of Germany’s innovative strength: 99 percent of all companies are SMEs, and around 60 percent of all employees work here. Comparatively unknown is the fact that there are also 11,000 medium-sized software and Internet companies. This MitTECHstand generates sales of 152 billion euros, employs half a million people and is growing three times as fast as the rest of the SME sector. Many of these digital pioneers were founded as early as the 1980s or 1990s and have developed software solutions that are used today in process automation or Industry 4.0 applications.

“We often associate software only with young start-ups from Berlin or Munich. In fact, however, we also have enormous innovative power in the classic software SME sector. There are many inventors here who have developed really good software solutions and brought them to market. We want to build a platform for these tech pioneers to facilitate their next growth steps,” says Felix Haas, Bits & Pretzels organizer and FLEX founding partner.

Long-term investment horizon

FLEX Capital provides medium-sized software companies with capital and know-how so that they can better assert themselves in international competition and scale more quickly. To this end, FLEX Capital invests 5 to 25 million euros in majority stakes – among other things in the context of succession arrangements – or in significant minority stakes. As a rule, these companies generate revenues of between 5 and 30 million euros, grow stably and operate profitably. In addition, FLEX Capital supports its portfolio companies in setting up professional structures. FLEX Capital also provides funding for promising growth projects and add-on acquisitions.

First portfolio company in the fund

FLEX Capital’s first portfolio company is a software world market leader from Bielefeld: Egoditor is active in every country in the world, generates 90 percent of its revenues abroad and has 100,000 paying customers. Nils Drescher and Nils Engelking founded Egoditor in 2009 and without outside capital developed it into a pioneer and market leader for QR code marketing software with annual growth rates in the mid double digits. Together with FLEX Capital, Egoditor now wants to take the next development step.

A fund for German tech pioneers

The six founders and partners of FLEX Capital are all successful software and Internet entrepreneurs who have founded numerous MitTECHstand companies themselves, including Absolventa, Insparx, Enmacc, Ada, IDnow and Amiando. The team has also made more than 130 tech investments (including Adyen, DeliveryHero, Käuferportal, Thermondo, TIER Mobility, Ladenzeile, Sellics, Monteurzimmer). The majority of the investors are also German software and Internet entrepreneurs who know the MitTECHstand and its challenges.

About FLEX Capital

FLEX Capital is a private equity fund founded by successful serial entrepreneurs that invests in profitable and growing companies from the German Internet and software midmarket. Announced in early 2023, the second fund of €300 million includes a commercial structure for the first time, enabling FLEX Capital to provide operational support to portfolio companies with a purpose-built 30-person team of experts, differentiating the investor from many other private equity funds. Currently, the FLEX portfolio comprises seven business platforms. For more information, visit www.flex.capital.

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