Bringing Investments to GNSSHow can the two meet?

1 December, 2010

SpaceTec Capital Partners GmbHSendlinger Strasse 22D-80331 Munich

Phone: +49 89 45 16 09 80www.spaceteccapital.com

horn@spaceteccapital.com

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About SpaceTec Capital Partners

Remote Sensing

GeoData

Navigation

Communi-cation

SatelliteInformation

Business

Integrated Applications

Traffic

MobilitySecurity

Climate

Logistics

Environment

RiskTelematicsResources

...

IT

Process automation

InternetSoftwareHardware

horn@spaceteccapital.dewww.spaceteccapital.de

Independent partnership backed by private investors. Based in Munich (Germany)

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SpaceTec Capital PartnersServices Lines & Client Base

InvestingVenture Capital

AdvisingInstitutions

Coaching Start-ups

Aristo Telemed AG

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Our Coaching Portfolio

Start-up/ Project Business AreaSpaceTec Role

Coaching Fundraising/Investing

High precision digital vector maps and applications

X X

Internet-sealed transport container and tracking

X

Mobile activation of locks (vehicles, buildings, PCs etc.) X

Eco-intelligent driving algorithms (CO2 Tracking in Fleets)

X X

Location Based Services for B2B customers (Truck, Automotive)

X X

Telemonitoring of patients X X

Outdoor navigation system for Blackberry (hiking, running, tourism)

X X

Ground-Air broadband laser Communications

X

Aristo Telemed AG

= Galileo Masters Winners*

*

*

*

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Types of Financing for GNSS Entrepreneurs in Europe

• Own Capital - will often not get you very far …

• Friends & Family – you can only ask them once

• Bank Credit – if you have something which can serve as security

• Grants / Research Funding - FP7, ESA, …: need partners, luck, patience

• Public Funds - co-financing instruments by member states or regions)

• Business Angels – very useful but difficult to find

• Venture Capital - “smart money” in exchange for many shares

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The Venture Capitalist Community thinks in broad categories – no radar for GNSS specificities yet!

• Investing > 1 MN Euro per investment

• Early stage investments are rare exceptions

• Currently focus on Location Based Services and mobile advertising , using IP and broadband infrastructure

• Not yet engaging on infrastructure and regulated applications (e.g. logistics, transport, security)

• Little experience in working with public institutions and space authorities

Source: EVCA/PEREP Analysis

605600

403

No. of companies

6

(Apr’10)

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Business Angels are helpful in early stages – but engaging them systematically is very difficult

Profile: • Former successful entrepreneurs who want to further their wealth and work

with teams they like• Wealthy individuals who do not like fund instruments

Strengths:• Trust-based & gut-feeling investment• Fast decisions• Willing to take more risk (also in early stages)• Provide coaching and network • Flexible investment time horizon• Ideal candidates for public co-investments

Challenges:• Some bias for regional/nearby investments• Very heterogeneous community• Not systematically engaged by GNSS community

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Seed-RoundIdea / Invention Incubation A-Round

“Interest”“Awareness”

“Office & Network”“Business Services”

“Near Public Money” > € 1.000k

The GNSS Funding Chain Instruments and its GAPS

Business AngelsOther

Incubators

Regional State Funds

No

n-S

pace

Bu

sin

ess

Pla

n

Co

mp

eti

tio

ns

ExitBSeed-Round

FP7

Pro

gra

mm

e

EU Risk Capital Fund for SME in GNSS ?

Coaching and Smart Private Co-investment Open Sky Technology Fund (ESA)

Venture Capital

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Seed-RoundIdea / Invention Incubation A-Round

Financing

Expert Voices on GNSS Applications Financing at a DG ENTR stakeholder workshop

ExitBSeed-RoundFinancing

“Public funds are a means of pushing forward the investment

value chain”

“Need stronger involvement of BUSINESS ANGELS in the respective

incubation schemes”

“The GALILEO Masters competition aims at deal

flow generation”

Selected quotes from Workshop Documentation

“More PRIVATE INVESTORS are needed - ready to coach start-

up companies”

“Private Investors are not aware of the huge potential of satellite-

based applications services”

“ESA Investment Forum offers access for the investment world

to valuable deals”“The current FP system

does not allow to link R&D to markets”

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Tourism & Transport Applications: A SpaceTec Capital Portfolio Example

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Better maps for high precision navigation

Consumer Applications

Public Sector Customer need: Enhance data for pedestrian and

bicycle navigation UM solution: Consulting services for improving workflows

as well as enriching datasets using UM technologies

Agriculture

Customer need: Include farm tracks and paths for optimal farm navigation in order to improve planting and harvesting efficiency

UM solution: Matching and conflation of Navteq data with enhanced datasets

Customer need: More detail than in traditional maps for intermodal mobile navigation

UM solution: Walk&Ride app – works offline at any time/any place and delivers highly detailed maps for multimodal navigation to iPhones and iPods

Navigation Customer need: Add detailed vector data for bicycle and

outdoor navigation UM solution: Production and delivery of Navteq data

conflated with enhanced datasets

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March 08 October 08 July 09

» IP secured» Technology proven» Supplier agreements» 13 staff

» Research project» Showcase » 3 founders

» Cooperation agreements» Germany map ready» Tackling cities in Europe» 15 staff

The coaching and investment story behind

» 6 iPhone Apps

» B2B customers

» Finalist Navteq LBS Challenge

» Exit process started

Dec 10

SpaceTec Capital Partners Role: Matching Finance Partners + Co-Financing

Coaching with GNSS and relevant industry network

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Public co-financing helped to create success cases

Key Data

•Revolutionary software to display 3D geo data on the internet •Spin–off from Intrinsic Graphics (3D graphics specialist) in 2001•Location: Mountain View, CA, USA•2004: TradeSale / Renaming to ...

Start - UpSeed Expansion Later Stage

2001

•BusinessAngels

•Sony CVC•NVIDIA•Business Angels

• In–Q –Tel (CIA Fund)

2003 2004

Trade Sale

Prof

itLo

ss

Financing History & Exit

•Start-up formed in Berlin in 1999 as Gate5 GmbH•Leading provider for software and services for LBS and information on mobile devices•2000: Winner of the E-economy award•2004: additional financing round 6,5 €MN•2006: Trade-sale to Nokia•Berlin today hub for Nokia‘s LBS activities (200 staff)

Start - UpSeed Expansion Later Stage

Prof

itLo

ss

1999 2002 20042000

•BrandenburgCapital

•IBB

•Innoven Partners•Target Partners•Brandenburg Capital•IBB

Trade Sale

USA

•Founded as private IT service company in the 90s•Leading player in developing and marketing a digital map database and software. Revenue 57 MUSD •Serving China Mobile, Bing Maps, BMW and Audi •Only digital map provider in China with Category A aerial photogrammetry capability•IPO at NASDAQ raised 108 MUSD

Start - UpSeed Expansion Later Stage

Prof

itLo

ss

199x

•Sequioa•KPCB•Walden

•Private •Funding

2007 2010

IPO

2001

China

EU

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EU Institutions should close remaining gaps in GNSSinnovation funding chain to activate private funds

• Tap the innovation potential beyond the GNSS community (IT, applications)

• Make attractive for commercial players by further simplification of process

• Link R&D funds to market development

• Complement “bricks & mortar” with specialised coaching programmes

• Develop an EU-driven risk capital fund• Leverage private know-how and co-

investment as “sanity check” for public

• Cooperate closely with specialised private co-investors

• Win pure private investors for GNSS

GNSS Idea Contests

Incubation Centers and Networks

Venture Capital & Business Angels

SME Support inEU priority applications

FP7/FP8 Research Programme

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Contact