German Startups Group Berlin GmbH & Co KGaA (DE:GSJGn) is a venture capital investment company that provides investors access to technology start-ups in Germany through a venture capital portfolio of 43 companies. It also has majority ownership of Exozet, a digital agency. Management believes 13 of its companies are ready for exit and, meanwhile, is motivated to realise portfolio gains this year to demonstrate its ability to add value, pay down debt and narrow the shares’ 24% discount to NAV. The NAV is likely understated and investors looking for exposure to this sector may find this company of interest.
Technology focused, broad portfolio
Established in 2012, German Startups Group (GSG) is a Berlin-based venture capital investment company founded by CEO Christoph Gerlinger, an experienced internet entrepreneur. GSG’s focus is on technology start-ups and currently 24 of its holdings, accounting for 91% of total value, are of particular significance, 13 of which it believes are ready for exit to realise value.
Further successful transactions can realise value
The company recently reported losses of €3.3m for 2016 (€3.8m profit in 2015). This reflects write-downs of four significant investments, including Auctionata, which filed for insolvency, and an exceptional write-off associated with costs incurred for a capital increase in 2016 that did not take place. Since the start of 2017, GSG has announced several profitable sales and Q117 has returned to profit, while management is also confident for Q2 profitability. Management is motivated to achieve further sales this year to demonstrate its ability to add value, pay down debt and narrow the discount to NAV.
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