The German Federal Ministry of Education and Research (BMBF) is joining forces with the venture capital firm Vesalius Biocapital and the technology transfer specialist Ascenion, in a €40 million fund set up to exploit the results of publicly-funded research.
The Spinnovator will select promising research that can form the basis of start-ups and then support these companies over five years.
“Adequate financing is an important prerequisite for innovation,” said Georg Schütte, State Secretary at the BMBF. “Our commitment to the Spinnovator is therefore part of our strategy to exploit the potential of top-level research in Germany, thereby promoting advances in healthcare and creating new jobs.”
While round half of the €40 million come from Vesalius Biocapital, the other half will be provided by the BMBF in the form of project-linked funding. Other investors will be able to co-invest in the start-ups.
Spinnovator is currently the biggest project of its kind in Germany, and the only one in which venture capitalists are playing an active role from the outset. “Through their investment they carry part of the risk, while their experience ensures that projects are selected and developed to be in tune with the market,” says Christian Stein, CEO of Ascenion. “The advantage for our start-ups is that they have a better chance of finding their place in the market after the period of support ends.”
The projects will primarily originate from Ascenion’s partner institutes, which are 24 publicly funded research institutes in the Helmholtz and Leibniz associations, together with the Hanover Medical School.
“This is a fantastic opportunity for us to be involved from the very beginning in the development of innovative projects from top-level German research and to align them to the market,” said Christian Schneider, Partner at Vesalius Biocapital. “The close cooperation between science, technology transfer and venture capital at this early project stage is new in Germany. I am confident that we can achieve a great deal together, and obtain a significant increase in value for all those involved.”
Both Ascenion and Vesalius Biocapital will take shares in the newly founded companies. Proceeds made by Ascenion from the subsequent sale of its shares will flow back to the research institutes from which the start-ups originated.
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