For any startup ecosystem to be successful, funding has to be available to enable its companies to grow. This is no truer than in Europe’s leading startup ecosystem, Munich-based UnternehmerTUM, where UVC Partners is providing much-needed capital to deeptech companies within the ecosystem and beyond.
The fund is an early-stage backer of B2B deeptech, climate tech, software and mobility startups that are working on potentially world-changing innovations, like opening up space as a platform for future technologies and flying taxis that could make electrified air travel a real possibility.
Every year, more than 3,000 startups approach the firm for funding, hoping to secure one of the roughly 10 investments it makes per year.
It’s very different from the past, where a lack of investment capital would eventually send Bavarian startups looking abroad for growth. According to the European Commission, just €400m was invested in deeptech companies — which require patient investors who often need to be willing to fund pre-revenue R&D — across the entire European continent in 2012.
Today, the funding landscape has completely changed. In 2023, €1.6bn was invested in German deeptech startups, and the government has announced a €1bn fund for deeptech and climate tech growth-stage companies. UVC Partner’s third fund generation closed in 2021 having raised a total of €260m in two funds.
In a world where tech sovereignty is creeping up European agendas, Sifted dived into UVC Partners — and how the fund has helped develop the “gamechangers” of tomorrow.
Over 100 years of experience
Originally founded in 2011 within UnternehmerTUM, the startup lab of the Technical University of Munich, the UVC Partners’ size and reach has grown over the years. Its first fund closed in 2011 at a modest €25m — today, it has around €400m in assets under management and it is currently raising its fourth fund, targeting €200-250m.
In Germany, they try to seek access through UnternehmerTUM and that brings us a lot of attention. We have a CEO of a large company going through our rooms every week.
“The outside world has understood that startups are essential for industry to grow,” says founding partner Andreas Unseld. “In previous times, CEOs did their trip to Silicon Valley [to access startups]. Now they have understood that other geographies are growing in terms of their startup output.
“In Germany, they try to seek access through UnternehmerTUM and that brings us a lot of attention. We have a CEO of a large company going through our rooms every week.”
UVC Partners has five partners who have a combined experience of over 100 years, having founded, funded and successfully exited numerous startups. Every member of the investment team has some form of technical education.
While still closely connected to the UnternehmerTUM ecosystem, roughly half of UVC Partner’s portfolio companies today are based beyond the Bavarian capital, including Heidelberg-based Aleph Alpha, a German GenAI company and OpenAI competitor, and Danish renewable energy firm Reel.
Other flagship investments include Flix, the German mobility company it backed in 2013 and which is expected to IPO in the near future, and ISAR Aerospace, a startup developing satellite launch rockets. The firm has achieved numerous profitable exits, including the fleet management startup Vimcar, sold to Battery Ventures in 2023, and Fazua, a company which develops drive systems for e-bikes, acquired by Porsche in 2022.
The firm is also leveraging its sprawling network of corporates, Mittelstand companies, universities and government figures to broaden its presence further and help establish new hubs for startup value creation within Germany.
A deep network
UnternehmerTUM has a more than 20-year track record in producing deeptech businesses. It runs 20 programmes spanning everything from business model basics to an incubator scheme, and every year 50 or so startups emerge from the hub.
We’re able to use these relationships to make very tailored introductions to our companies when they need it.
The startup lab works with more than 200 corporate partners, while UVC can provide an even broader industry network. UVC partners also regularly host events with corporate CEOs and asset managers, who descend on Munich to discuss the future of their respective industries.
UVC portfolio startups Sifted spoke to highlighted this exposure to industry heavyweights and policymakers as a standout advantage of the ecosystem. While early-stage venture firms commonly provide HR and PR support, UVC Partners would say it’s this contact book that gives it a unique edge over other firms.
“We have a unit called Value Creation that focuses on customer creation and knowledge,” explains UVC partner Benjamin Erhart. “We’re tapping into the existing business relations of UnternehmerTUM and we’re able to use these relationships to make very tailored introductions to our companies when they need it. It’s both unique, and very productive.”
Munich-based automotive startup DeepDrive raised funding from UVC Partners in 2022. It counts current and former BMW executives among its advisors and investors — whom it was introduced to via the ecosystem network.
Its cofounder Felix Pörnbacher says DeepDrive would be “a year behind where we are now” without this support.
“[It] allowed us to get up to speed quickly, and to build an amazing network of other super exciting companies,” he says. “That wouldn’t be possible if we weren’t in this ecosystem.”
Beyond Bavaria
This method of bringing together industry, academia, entrepreneurship and funding opportunities is proving successful. Once it exits its investment in Flix, Unseld estimates UVC Partners will have generated a 3-4x return on its first fund.
These achievements are attracting companies beyond Bavaria to the ecosystem.
It’s an image of how Europe can [meet] the challenges of the 21st century and not live in the past.
Jan Hiesserich, vice president of strategy and communications at Aleph Alpha, says it made sense for the business to take investment from UVC Partners because of its relationship with UnternehmerTUM, and the pool of talent and potential partners that it provides access to.
The technical experience of UVC’s partners sweetened the deal. Aleph Alpha creates large language models (LLMs) for B2B applications, and “UVC was already quite invested in the whole LLM idea”, says Hiesserich. “They already had a good idea of what works and what doesn’t, and that’s why then [we] hit it off.”
Proxima Fusion founder Francesco Sciortino says a research role at the world-renowned Max Planck Institute for Plasma Physics is what brought him to Munich. But it was the UnternehmerTUM ecosystem that showed it would be possible to launch his startup despite the highly technical nature — and long time scales — of developing fusion power plants.
Proxima Fusion received investment from UVC Partners in May 2023, and Sciortino says he has also been able to meet with German vice chancellor Robert Habeck thanks to the ecosystem’s connections.
“It’s not normal to have such exposure from very early days,” he says, adding he benefited from people introducing him to their own networks. Proxima Fusion is the first startup to ever spin out of the Max Planck Institute.
“It’s an image of how Europe can [meet] the challenges of the 21st century and not live in the past,” says Sciortino.
Erhart agrees adding that “by having this dense accumulation of role models there is a huge impact on the ambition and ability level of founders”.
