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Asian investors bet on Berlin start-up

BerlinFor the German start-up scene, it is a record: The booking platform Getyourguide has completed a financing round in the amount of 484 million US dollars. The main investors are the Japanese company Softbank and Singapore's state fund Temasek. The German investor Klaus Hommels and his Lakestar fund also participated.

Getyourguide is now likely to be a unicorn – a company worth more than a billion dollars. The start-up arranges guided tours or tickets for museums and other tourist attractions. The company is based in Berlin with around 500 employees. It should be 800 by the end of the year.

"This is a good day for us – and for Europe as a location," says Johannes Reck, CEO of Getyourguide, Handelsblatt. Florian Nöll, chairman of the Federal Association of German Start-ups, also believes that the news is positive for the entire industry: "The investment will attract international attention," he says. "And it shows: German founders are in no way inferior to those in the US and China. We can build equally successful companies here. "

There is a downer, however: Financing rounds of this size remain a rarity in this country. Recently, the used-car platform Auto 1 has announced a similarly high investment – led by the Softbank Vision Fund.

With a fortune of $ 100 billion, Group founder Masayoshi Son has launched the world's largest technology fund – and is already planning the next one. European funds, on the other hand, are too small to raise such sums. For the location that is bitter, says Nöll: "If the start-ups go one day to the stock market, the profits flow into the US or Asia."

But why invest the Japanese just in a German experience platform? And what does that say about the German start-up scene?

The founders of Getyourguide had "done pretty well," says Christian Saller, Partner at Holtzbrinck Ventures, which has invested privately in the start-up. First of all, they would have put on the right market.

Saller knows his way around the travel market. He was previously CEO of Swoodoo, a metasearch engine for flights he sold to US competitor Kayak. This in turn belongs today to Priceline, the parent company of the hotel booking platform Booking.

In addition: with the online booking of travel worldwide 630 billion dollars were implemented in 2017, tendency: rising. One of the most important trends in the industry is the individualization – and this includes the experiences offered by Getyourguide.

Founder and CEO Johannes Reck estimates the market potential at 180 billion euros. "A dream market for an Internet platform," says Saller. After all, the business with hundreds of thousands of micro-providers has so far been fragmented and little digitized.

Business model further developed

This shortcoming had the Getyourguide founders recognized early. Reck, who once studied biochemistry and actually wanted to become a brain researcher, programmed around ten years ago in Zurich with a few fellow students in his free time a platform on which people should find each other to show each other their city. The reason: Reck had previously been on a trip to China with his fellow student Tao Tao – and felt completely lost in the first place, due to a lack of local knowledge.

The project was so well received by the users that the two, together with Martin Sieber and Tobias Rein, founded a company and moved to Berlin, where there were already more start-ups and thus potential employees. Meanwhile more than 500 people work for Getyourguide.

The business model has also evolved – instead of private guided tours, the start-up now offers so-called "experiences" – this can be a tour of downtown Lisbon, a guided tour of Hamburg's Elbphilharmonie or a ticket to the Louvre.

According to the company, 25 million such experiences have meanwhile been communicated and attention has been drawn to well-known investors over the course of time. As early as 2012, one of the most successful Silicon Valley funds was acquired by Getyourguide, Spark Capital. The most prominent, however, has only been added with the current financing round: the Softbank Vision Fund.

Ted Fike, Partner at Softbank Investment Advisers and a new member of Getyourguide's board of directors, explains the investment: "Consumers, most notably Millennials, increasingly spend their disposable income on travel experiences. We firmly believe that Getyourguide can leverage this seismographic shift to bring together the highly fragmented travel market of global promoters and vendors, enabling them to modernize access to the best travel experiences in the world. "

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However, others have also recognized the potential: Tour operators such as Tui and booking platforms such as Airbnb or Booking are now also focusing on experiences. Reck stays calm: "We discovered the market, we were always two steps ahead. You can only do that if you focus. "

Reck and his co-founders have managed to turn managers who need to do it all at once into managers who can delegate and lead, says Saller appreciatively. That is not self-evident.

The Holtzbrinck partner also believes that the entire start-up scene will benefit from a mega-investment like Getyourguide – if only because all those who sold their shares in the course of the transaction now have cash in their hands again Would invest start-ups.

Europe has more and more unicorns

Just like Getyourguide founder Reck, who is also invested in Tourlane, another travel start-up from Berlin. Reck is not only helping out with advice, he has also introduced the founders of Tourlane to investors such as Sequoia from Silicon Valley.

On the other hand, says Saller, large companies such as Getyourguide, Zalando or Delivery Hero are always also talent makers for talented individuals, who would bring the secret of success of one company into the next or into one's own company.

One successful founder finances the next – that's how the start-up scene in California grew up. And that is how the Berlin start-up scene, and with it the German and European ecosystem, becomes ever larger and more interconnected. Over the past 15 years, 61 European companies have valued more than $ 1 billion, 17 of them in 2018 alone.

Among the German unicorns are the used car platform Auto1, the software start-up Teamviewer and the cooking box supplier Hello Fresh. According to industry sources, Getyourguide is the next addition to the club – despite the fact that the company is silent about the exact amount of the rating.

The very big financing rounds are still rare in this country – and if, then the money comes mostly not from Europe, but from the US or from Asia. The last major round of financing that matched Getyourguide's size was that of the used-car platform Auto1 – and it was also led by Softbank.

Investor Klaus Hommels, who has invested a smaller amount in Getyourguide with his Lakestar fund, has been worried about this development for a long time: "The foreign money increasingly controls the most innovative young companies from investors outside Europe. I think it's even possible that in a few years, powerful international donors will dominate the industries of the future in Europe. "

For Florian Nöll, head of the Federal Association of German Startups, it is clear "a policy failure, which here follows a market failure". The regulation, especially of life insurers, is to blame for the fact that the funds in this country could not collect as much money as is invested in start-ups in China or in the USA.

Founder Reck still has another problem with regulation: he would like to involve his employees in his company. However, this is difficult to achieve in Germany, he and a number of other tech entrepreneurs say, who have long been in the ears of politics with this concern. Start-ups that could not make a profit and pay high salaries would have to remain competitive in the hotly contested talent market. Getyourguide alone wants to hire 300 people by the end of the year – and that's good news for everyone.

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