Case study

How Dealroom helps deep-tech seed investor Freigeist source the deals that will shape the future.

“Dealroom is one of the best platforms for seeing lots of companies in different regions and different business spheres that fall outside our immediate network. It has added another pillar to how we do deal sourcing.”

Niklas Hebborn

Junior partner Freigeist

Deep-tech seed investor

Freigeist Capital is a deep-tech seed investor based in Bonn. It invests in innovative tech companies that have the potential to shape our future.

  • Challenges

    • Sourcing Seed a pre-Series A stage companies in the deep-tech space
    • Difficult to reach beyond personal networks to see what’s happening right across Europe
    • Lack of specific, company-level data to support deal validation
  • Solutions

    • Use Dealroom’s platform for fast and intuitive analysis of the European tech investment landscape
    • Deeper dives into company, market and competitor analysis for startup-sector transparency at a glance
    • Expand outbound deal sourcing by directly approaching interesting companies found in the Dealroom database
  • Results

    • Added a valuable new pillar to the way deals are sourced and validated, through Dealroom
    • Increased research efficiency to uncover the right investments faster
    • Raised awareness of new, disruptive tech startups to support

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Challenges

Efficiently sourcing companies in the deep tech space

Funding European tech startups with investments up to seven figures, it makes sense that Freigeist Capital is always on the lookout for the next game-changing tech company to support. The fund specialises in deep tech investments – the type of technologies that start out in a science lab and have the potential to shape the future.

“We choose investments that have a really strong competitive advantage in their technology,” says Niklas Hebborn, junior partner at Freigeist. “Is the technology good, is the product built on it unique or outstanding? That’s how we identify investments. We’re interested in everything from energy and mobility to environmental resources, as long as the company has strong IP and knowhow built up over years.” 

In addition to capital, Freigeist’s main value contribution to its portfolio companies is its active operational support. The fund thinks of itself as co-founder rather than investor, and will assist with operations, HR, finance, and everything else that will help the company grow fast and effectively. “We really are hands on supporting our companies, which is why we only do 2-3 investments per year,” explains Niklas.

When it comes to sourcing, Freigeist has a few different angles. “Our CEO is really well known in Germany, and we have a broad network through him. Media coverage is also giving us a lot of exposure to deals. Inbound, we proactively work with universities and research institutes, so we have good connections with people working in these entrepreneurship-centred environments.”  

While networks are crucial to Freigeist’s deal sourcing, it has limitations. “You simply cannot see everything within your personal network,” explains Niklas. “That’s why we started working with Dealroom, as it seemed to be the best platform for seeing lots of companies in different regions and different business spheres that fall outside our immediate network.”

Solution

Smart intelligence engine to support deal-sourcing efforts

While technology is the entry point for capturing Freigeist’s attention, what drives the decision-making is the startup team and the size of the market. “We don’t invest in niche products, only products that exist on a global scale,” says Niklas. “If the technology is right, we go deep into the competitive environment and then see whether the right team is on board. We’re looking for strong business leaders who can build a big company out of a strong technology. If these criteria are met, it’s a potential investment case for us.”

When performing due diligence on a deal, all VC funds will look at data reports and market research reports published by the big consulting houses and other research institutes. Typically, these reports are broad and show industries on a high level. The amount of company-level data is low, and the quality is often poor.

“What we like about Dealroom is that we can do really specific analysis of certain companies in comparison to other companies in a certain market segment. If we have a company in the quantum computing industry, for example, obviously we can find big papers about this market since it’s growing. But we’ve never been able to access specific data on startups and growing companies in this sector,” Niklas explains.

“With Dealroom, we finally have an opportunity to identify those companies that are active in a space, in a way that’s transparent and easy to digest. Dealroom gives us competitor analysis and startup transparency at a glance, which is really helpful for our daily business.”

Results

Finding the best path in to the right long-term investments

Freigeist continues to fund extraordinary companies in the tech space, its investment portfolio includes high-profile startups like Lilium, Pitch and YFood.  

According to Niklas, Dealroom is part of the solution that enables Freigeist to continuously source, fund and build disruptive technology companies—which is good, because the sector doesn’t show any signs of slowing down!

 

With Dealroom, it’s easy to run a search, look at the players in a particular sector, see exactly which companies received the most funding and view the team behind the idea.   

“That’s what we like to have—data transparency on all companies in the market,” Niklas says.