2. September 2013–
Berlin-based company builder Team Europe (disclosure: an investor in Vertical Media, VentureVillage's parent company) is making big changes to its business strategy, resulting in staff cuts. Its newly-relaunched website points to a downsizing in activities, with an aim of co-founding just two "fast-growing and sustainable" internet companies per year.
According to the Berliner Morgenpost, Team Europe is reducing the numbers of companies it launches in an effort to refocus. No new ventures are planned for this year.
Team Europe is led by partners Kolja Hebenstreit, Lukasz Gadowski, Markus Fuhrmann and newcomer Emmanuel Thomassin. According to the Morgenpost, while Gadowski previously held the majority of shares in Team Europe's portfolio companies, in the future Gadowski, Hebenstreit and Fuhrmann will each hold an even amount of shares in each business. Thomassin will receive a minority shareholding.
Shrinking staff numbers
As part of the restructuring, the number of staff working directly for Team Europe is expected to shrink to 22 staff members – at its peak, the company builder apparently employed 38 people. Hebenstreit told the Morgenpost that staff in the marketing department were redistributed to portfolio companies but didn't mention any redundancies or give exact numbers. VentureVillage understands that in mid-August the marketing department housed six staff, down from about 14 staff excluding two interns in mid-April.
Team Europe exits select portfolio companies
Team Europe bowed out of some of its portfolio companies earlier this year, with underperforming shoe shop ChicChickClub taken over by JustFab and the company builder's shares in eyewear retailer Mister Spex acquired following a new funding round.
Now, VentureVillage understands that online marketing agency Projecter will be sold to a brand advice agency from Leipzig. Team Europe will also exit HR services agency i-potentials, with shares to be sold back to founder Constanze Buchheim – although Buchheim clarified today that the talks were triggered by i-potentials' own expansion plans rather than the restructuring. The agency plans to launch a second brand for executive search and "needed to have more shares to be able to acquire more operative power", she said. The deal did close more quickly as a result of the restructuring.
Team Europe's plan to focus resources is "very smart", Buchheim said. "In my eyes, the incubator model itself has some shortcomings, which can be seen everywhere – Team Europe is just being consequent now.”
What about the rest of the portfolio?
As for food ordering platform Delivery Hero, arguably the most successful company in Team Europe's portfolio, CEO Niklas Östberg said: "(I) can only answer from a Delivery Hero perspective and here it will not have any impact. We will continue to work on our vision to deliver an awesome takeaway experience globally. It will also not have any impact on the direct shareholding of Delivery Hero."
It's unclear what impact the changes will have on Team Europe's other major portfolio companies SponsorPay, HitFox and Madvertise. According to the Morgenpost, Team Europe will continue involvement with Wummelkiste and Kirondo.
The Berliner Morgenpost mentioned rumours Vertical Media is in early-stage talks with interested large publishing houses. Vertical Media CEO Mark Hoffmann said: "It is correct insofar that we have been in contact with these companies in regards to potential investments and strategic cooperation for a long time... What's important here is that none of this is currently foreseeable and we are, at the most, in an early stage."
Fuhrmann, known for his connections and experience in Asia, became a Team Europe partner just over a year ago – does the recent downsizing imply less of a focus on markets outside Europe? "Concerning Asia, nothing will change and we will heavily support the companies that are operating there," Fuhrmann said today. "I will not start something new in Asia for now but rather support the existing companies even more."
Additional reporting by Nina Fowler and Linsey Fryatt
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