eCAPITAL launches the first dedicated Cybersecurity VC-Fund in GermanyeCAPITAL NEWS
Cyber-attacks result in costs of more than € 500 thousand in every second corporation. Projections indicate that the worldwide damages caused by such attacks will rise up to USD 6 trillion by the year 2021 – which is significantly more than the German gross domestic product. German federal police report more than 85.000 cyberattacks recorded by the authorities in 2017, while it can be assumed that the majority of attacks is not even reported yet.
The number of attacks rose by up to 600 % especially within new technology branches and growth markets like the internet of things (IoT). Due to the progressive digitalization the focus of attackers broadens and as a result ever more areas of life are affected. Headlines about attacks on nuclear power plants, millions of hacked routers, data-leaks at governments and international corporations, or crypto-trojans fill the daily news. Thus, it is obvious that cybersecurity is a cross-sectional topic and allows for numerous innovative business models and opportunities for founders.
The rising relevance of cybersecurity becomes also apparent when considering the investments in this field. In 2018 approximately USD 5.9 billion have been invested in cybersecurity companies worldwide. Thereof, only a small fraction accounts for Europe. The challenge which the European data security landscape is facing is not a lack of cutting-edge research or innovative ideas of founders but rather the missing venture capital investors with applicable technological expertise, investment experience in this field as well as a worldwide network.
eCAPITAL now steps into this gap with a dedicated fund for cybersecurity investments. While the eCAPITAL Cybersecurity Fund closed at a volume of € 30 million on December 31, 2018, it comes as a parallel vehicle to the eCAPITAL Fund IV with a broader investment focus, which closed end of 2017 at € 100 million and of which € 20 million are allocated for cybersecurity investments. Thus, in total eCAPITAL is now able to invest € 50 million into cybersecurity companies. eCAPITAL Cybersecurity is in Germany the first such dedicated fund with this focus. Fund-investors include the ERP Fund, RAG Foundation, NRW.BANK as well as insurances, pension funds and individuals.
As a long-standing, independent VC investment firm in the high-tech space, we are pleased to be in the position to now support particularly those start-ups that develop security solutions and business models that safeguard various technology trends in areas such as Internet of Things and Industry 4.0.
Dr. Paul-Josef Patt,
CEO of eCAPITAL entrepreneurial Partners
For the selection and the support of the investments, the new fund can rely on proven cybersecurity experts. Willi Mannheims, one of the managing partners at eCAPITAL AG, has founded, established and successfully sold or IPOed several data security companies (e.g. Secunet, escrypt). Another security entrepreneur in the team is venture partner Hans-Christoph Quelle, who was one of the founders of secusmart. secusmart is providing the secure mobile phones for the German Federal Government. On the technological side, world-leading researchers Thorsten Holz, Christof Paar (both professors at the Ruhr University in Bochum) and Norbert Pohlmann (professor at the Institute for Internet Security in Gelsenkirchen) act as cybersecurity partners. As part of the fund’s team, they evaluate the technologies and add value as sparring partners to the founders and developers at the portfolio companies.
With nyris, a Berlin-based company active in visual search and image recognition, eCAPITAL Cybersecurity Fund has already made its first investment. The eCAPITAL Cybersecurity team is now searching and screening further promising companies in the fields of information/ data/ systems security and privacy protection. Addressed are founders that are looking for capital as well as experienced technology and management experts to support their growth strategies.
Willi Mannheims summing it up: “By means of coupling technology experts, entrepreneurs and investors in a broad network via this fund, we can make a contribution to data security in Germany and Europe. We are excited!”
eCAPITAL is a venture capital firm that provides early to growth stage funding to technology companies in the fields of software & information technology, cybersecurity, industry 4.0, new materials and cleantech. Founded in 1999, eCAPITAL has a history of supporting entrepreneurs determined to build companies with lasting significance. Partnering with eCAPITAL means joining an international network of business leaders, entrepreneurs, technologists and potential partners. eCAPITAL is located in Germany and currently manages funds with over EUR 220 million under management.