Behind the Scenes - gridscale in an Interview with the investment managers of HTGF and EnjoyVenture

Datum: 16.02.2017

Keywords: , , , ,

Interview with Henrik Hasenkamp, CEO at gridscale GmbH, Kristin Müller, Investment Manager at High-Tech-Gründerfonds (HTGF) and Andreas Schenk, Investment Manager at EnjoyVenture. Moderation: Nicola Römer, CMO at gridscale GmbH.

NICOLA:

Hello everybody!

Looking back on the year 2016, I’d like to talk to you about the seed round of August. For us it was a very important moment, when the investment of HTGF and BLSW into gridscale was finalized. We were very pleased that you believe in our development and thus enable us to grow across locations.

For the beginning, I suggest to start with a small introduction. Henrik, would you briefly introduce yourself and say a few sentences about the idea behind gridscale?

HENRIK:

With pleasure! My name is Henrik Hasenkamp and I am one of three founders. With gridscale, we intend to tailor cloud IT infrastructure to the user. We want to remove hurdles from today’s everyday life, which means that the average IT user should be able to build, manage and control IT infrastructure. In this way, we are lifting the user experience – which does not take place on existing platforms – into a new dimension.. In addition, as a very technically savvy founder team, we see a great need to optimize availability issues in the industry. Classic SLA situations of 99, X% result in an IT infrastructure being at risk to be offline for hours or even a few days a year. We are of the opinion that ,with the technologies available today, it is not possible to explain how providers position themselves in this way. We have therefore chosen an approach that will raise the overall level of availability to a new level. We are  only satisfied if there is a so-called “zero-downtime guarantee”. This means that there is no single failure on the customer side.

NICOLA:

Thank you, Henrik! Over to you, Kristin and Andreas – maybe you can also say a few words about you and your respective funds.

KRISTIN:

My name is Kristin Müller and I am an investment manager at High-Tech Gründerfonds. HTGF is the largest seed financier in Germany. We have been around for 11 years now. During this time, we made more than 400 investments, with 270 companies currently being active in our portfolio. We have different focal points – one team is mainly concerned with life sciences and healthcare, another is more focused on hardware and industrial software and I am on the media / communication and internet team.

To my personal background: I originally studied business administration and focused on the financing of start-ups. Thereafter, I started  a graduate trainee program at Deutsche Telekom, where I got to know financial business units within the group. Lastly, I was at hub: raum, the incubator and accelerator of Deutsche Telekom. Here, I was mainly active in business development before changing to the financing side again at HTGF.

ANDREAS:

My name is Andreas Schenk. I am an investment manager at EnjoyVenture (investment management arm of the BLSW fund). Here, I am particularly focused on “X”aaS, i.e. Infrastructure-as-a-Service, Platform-as-a-Service and Software-as-a-Service. Another focus area of mine is the deal-flow. I look at new startups, am involved in the due diligence and am a lot on the road in Germany to find new investment opportunities for us.

Perhaps briefly to EnjoyVenture: We are a relatively small fund management team, meanwhile have a portfolio of over 30 portfolio companies, which are mostly based in NRW, Hanover, Berlin and Hamburg. We invest across topics that are of interest to us. The focus is mostly on digital business models, but also on production and on life-science topics. Overall, we have a fund volume of around 70 million euros.

NICOLA:

Henrik, you as the founder of gridscale have looked at several investors for the seed round. How did the process work and what were the initial reasons for you to follow the financing process with HTGF and BLSW?

HENRIK:

Indeed, in addition to looking at investors during that phase, we also had an offer for a very early purchase of gridscale. We finally decided for HTGF and BLSW for two reasons. On the one hand, we needed a certain capital size to realize and scale our idea. On the other hand, we wanted investors who who we could talk to at eye level. We were very inexperienced when we kicked off the process and sought information in our network. Depending on which investors were mentioned as an example, one could hear some bad stories – extreme pressure or founders, which were regarded as a marionette by the investors were only a few examples. That is why we have focused more closely on the investors, which have been positively mentioned to us. BLSW was e.g. a hot recommendation of the NRW-Bank, to which we have placed a great deal of value and which has simply resulted in a trust advantage. As for HTGF, a befriended company recommended you (looking at Kristin) to us in which you had previously invested. That gave us the good feeling and hence for us both components came together: on the one hand, the funding level and on the other hand a partner at eye level. We can now greatly benefit from the your network – we have found contacts, have done business through the network, are present in the media and have gained a certain publicity through you. At the same time, you are an important sparring partner for us; someone we can ask in case of uncertainty. I have no negative points so far. What strengthens me in the decision we have made.

KRISTIN:

(Smiles) That ‘s nice to hear!

NICOLA:

Kristin and Andreas, what were the main arguments in gridscale for you to invest?

ANDREAS:

For us, we were looking at several companies in the field of Infrastructure-as-a-Service and Platform-as-a-Service. So we had a very good comparison: How far are the teams? How far is the technology?

The decisive factor was the fact that the team was by far the best of those we looked at. On the one hand in the sense of the competences, which were well divided. On the other hand, you were a team that was already very experienced in the hosting market; also in relatively high positions in large companies. Hence we saw you armed for bigger growth.

Of course, it was also gridscale technology, which was quite advanced compared to others with first customers and sales. Your head quarters in Cologne and the link to Wuppertal probably also helped a bit at this point! 😉

KRISTIN:

I agree. The team was also main reason for our decision. In the end, you invest in the people. The idea and the company usually still form. But if you already have a team, in which all important functions are occupied, the uncertainty of the investment significantly reduces. In addition, we saw a product that really had the potential to scale strongly.

NICOLA:

Kristin and Andreas, what do you think is a „must-have“ for founders to be successful with their idea?

KRISTIN:

I believe the most important characteristic of founders is to have an idea and then really be 100 percent focused and to be willing to go the extra mile.

ANDREAS:

Yes, I agree. On the one hand, a founder must have this motivation and vision, and be able to stand up through difficult times. I have to say quite clearly that the best teams also get by times with setbacks and are able to move on. On the other hand, a founder must also be prepared to accept and implement criticism and advice from the environment, including investors. The readiness must be there to adapt the business model if it does not fit in some places. And, of course, a good start-up manages to build a talented team and keep it motivated. This is almost more important, because the success of the idea is teamwork.

NICOLA:

How does gridscale match the rest of your current portfolio?

KRISTIN:

For me, griscale is a bit “exotic“. My other companies are more B2B SaaS models. I see gridscale as an addition to my portfolio, in principle as an “enabler”, which makes the scaling of B2B SaaS models possible through the innovative nature of cloud computing.

NICOLA:

What are the most important milestones for you over the next three years? Why will gridscale be able to compete against incumbents and newcomers in the next 3 years?

KRISTIN:

What is now most important for gridscale in this phase is to build sales. Furthermore, it is important to then build the organizational structure  in order to maintain the speed when the organization is growing. Another point is not losing sight of the product and keeping the high quality in product development. I think these are the three most important points for the next 1 ½ to 3 years. Over the next five years the topic of internationalization will be added.

ANDREAS:

That’s how I see it, too. On the subject of competition, I assume that we simply have a very strong technology, which will prevail at the customer. If everything is going well, the good service and the great team will continue spread. 

NICOLA:

Wonderful! I would like to thank you all very much!

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