Life sciences and AI offer enormous potential right now
As Managing Director of Brandenburg Kapital, Thomas Krause supports startups and tech firms. He discusses innovations from Brandenburg, Berlin ties, and bio:cap’s value for investors.
Mr. Krause, could you please briefly introduce Brandenburg Kapital to us?
Thomas Krause: Brandenburg Kapital is a subsidiary of the Investment Bank of the State of Brandenburg. We are the leading venture capital investor in the Brandenburg economic region. Our focus is on technology-driven companies with strong growth potential in three areas: life sciences/medtech/digital health, industrial applications and IT/communications. We invest in high-growth start-ups through direct venture capital investments. We also support established SMEs through mezzanine structures.
How extensive is your investment portfolio?
Thomas Krause: We are already in our seventh fund generation. The size of our currently investing fund is approximately 100 million euros, and we manage a portfolio of more than 50 direct investments in start-ups. Of course, these figures clearly show that we need an established network to other investors to finance our start-ups trough the various growth stages until the intended exit. On our own, we would not be able to support those start-ups that need sometimes tens of millions of euros in capital. We need the financial power of our co-investors. In return, we contribute our scientific expertise in the individual specialist areas, which we also use across all sectors.
When it comes to start-ups and AI, people often think of Berlin rather than the state of Brandenburg. Do you always find enough start-ups to invest in?
Thomas Krause: Yes, don't worry, Brandenburg has its own centres, too (laughs). But we see ourselves more as one large Berlin-Brandenburg metropolitan region anyway. As state investors, we are in exchange with IBB Ventures, for example, and the many scientific institutes and companies in the region also exchange ideas, conduct joint research and make their infrastructure available to each other. Employees commute from Brandenburg to Berlin and vice versa. A total of around 410,000 people work in the healthcare industry in the region, and we have around 40 scientific institutions in the field of life sciences. We operate in a large economic region – and beyond. This is because the life sciences and AI sectors in particular are very quickly becoming international. In this industry, development is complex and requires the brightest minds – and they come from all over the world. This also applies for to the international investors landscape.
Where are the centres for life sciences and AI in Brandenburg?
Thomas Krause: Potsdam is one of the cities with the highest number of start-ups in eastern Germany. We have the Hasso Plattner Institute (HPI) here, which is an absolute leader in IT and AI research and conducts research in the field of digital health under Prof. Dr. Ariel Stern. In Golm, we have the Potsdam Science Park, in Hermannswerder, we have a centre for biotechnology. And in my opinion, Hennigsdorf has a huge potential, where several dozen life sciences start-ups have settled, some of which we also have in our portfolio. Luckenwalde is also worth mentioning. Also, last year, the state of Brandenburg established six start-up centres and decided to build a university hospital in Cottbus. So, we can expect a lot more invention and innovation to come.
Can you name a few particularly exciting start-ups in which Brandenburg Kapital has invested?
Thomas Krause: Certainly – just examples from the life sciences sector. Last year, we completed several very successful financing rounds with major investors. We raised €55 million in capital for 4Teen4 and €20 million for Captain-T-Cell. 4Teen4 is currently in phase 2 clinical trial for the approval of the antibody to treat shock and restore organ function. Captain-T-Cell develops novel immunotherapies for cancer patients using TCR-based T-cell therapies. Another example: we got involved with ThinkSono back already in 2020 – this involves AI-based diagnosis of venous thrombosis. Their software guides medical staff through the scan of the vein and automatically sends the own diagnosis to radiology. From scan to evaluation in case of a life-threatening illness, our record time is less than 20 minutes instead of hours.
What are your hopes for bio:cap?
Thomas Krause: For start-ups and companies, it is so valuable that they can present themselves to an international audience and investors. But bio:cap can not only help bring start-ups together with investors, but also investors with investors. Given the high capital requirements, particularly in drug development, we see that venture capital investors in Europe generally have to operate in consortia. That's why bio:cap also offers a great opportunity to them and also us.
Why is bio:cap so important right now?
Thomas Krause: What I find really exciting is that the old pharmaceutical world is merging with AI developments. At the same time, however, the digitalisation of the healthcare industry is just beginning. This offers enormous potential. Especially since the healthcare sector is under cost pressure, with a shortage of skilled workers, an ageing population and, as a result, an increase in still difficult-to-treat conditions such as Alzheimer's. Solutions are needed. And I am convinced that many of these will come from young start-ups. bio:cap provides the platform to drive this development forward by bringing together founders, startups, decision-makers and investors.