A lot of the partly imaginary rivalry between Berlin and London comes down to capital. London is one of the centers of global finance, and is clearly the place to head for funding and relevant advice. However, some of that magic may be about to start heading Berlin’s way.
London-based Torch Partners, an investment bank that advises on financing rounds and M&A, has recently been poking around the Berlin scene. And now it has revealed the formal establishment of a Berlin branch, which will open in November.
Not bad news for a scene that’s eagerly awaiting big exits for validation, and looking for easier access to the money.
“I’ve spent last 20 years in Germany and have seen how Berlin was hyped from last time we had a tech bubble,” Jens Munk, who will be heading up Torch’s Berlin branch, told me. “Now there’s a lot of different variables coming together. There’s money. More of an ecosystem has developed.”
According to Munk, a lot of young Berlin startups are displaying creativity but “nobody is helping them generate value over an extended amount of time”. And wouldn’t you know it, Torch has a “strategic long-term view on generating value”.
That’s fair enough: Torch has had a hand in the development and/or sale of such success stories as OnApp, Huddle and Just Eat, not to mention TelecityGroup, Summit Partners, Crashpadder and SkyDox.
So about those exits we’re not seeing in Berlin. Perhaps surprisingly, Munk doesn’t see that as a problem – indeed, he points out that Silicon Valley and London have headstarts of 40 and 20 years respectively. And Berlin, he says, is shedding its copycat past and creating the sort of IP that’s needed for deals to flow.
“Berlin is going to pick up and generate some pretty massive exits,” he said. “We feel the timing is right for Torch.”
Interestingly, Torch seems to be looking past the consumer-centricism that has defined the Berlin startup scene’s public face. Rupert Robson, the investment bank’s CEO, told me that he was also very intrigued by the B2B and cloud activities bubbling away there.
“We feel strengths across the piece,” Robson said. “We believe the B2B SaaS world is growing up across Europe and clearly Berlin is a leading place here. We’re very excited by what’s happening in the enterprise world, and we see Berlin is going to play an important part in that.”
Which companies are already catching Torch’s eye? Unsurprisingly, Munk and Robson were loath to name names. But I imagine we’ll find out soon enough.