Porsche and Axel Springer Boost APX Fund to €55M

APX, the Berlin-based early-stage investment fund, has announced a significant increase in funding from its investors, European publisher Axel Springer and sports car manufacturer Porsche, bringing the total to €55 million.

This infusion of capital allows APX, established in 2018, to now provide up to €500,000 in pre-Series A seed funding to each company it supports. This represents a substantial increase from the initial funding level of up to €100,000. To date, the fund has invested in over 70 companies and aims to expand its portfolio to nearly 200 by 2022.

When APX was initially launched, the precise investment amounts from Porsche and Axel Springer were not publicly disclosed. The team now states that this new investment more than doubles the fund’s total resources for investing in both existing and new companies. APX also clarified that the fund’s total volume is “at least” €55 million, acknowledging the potential for further investment in particularly promising ventures.

Alongside this new funding, APX has decided to discontinue its 100-day accelerator program, shifting instead to a model of sustained, long-term support for its portfolio companies, including continued participation in subsequent funding rounds.

“We are targeting investments in 50 or more companies this year – a considerable increase from the 35 we supported last year,” explained APX founding managing director Henric Hungerhoff. “We believe our deal sourcing processes and overall operations are now sufficiently refined to attract high-quality founders. Our objective is to continue this growth, potentially reaching 70 companies next year. We are already observing strong synergistic effects and valuable networking opportunities within our portfolio, with founders actively assisting and learning from one another.”

Image Credits: APX

Hungerhoff emphasized the team’s growing confidence in its ability to identify promising investment opportunities, attributing this to a data-driven approach. While leveraging its existing network and the networks of its founders, APX has also established a scout program at prominent European universities to proactively identify potential founders.

Jörg Rheinboldt, also a founding managing director of APX and formerly the CEO of Axel Springer’s Plug and Play accelerator, highlighted that APX does not require founders to formally pitch their ideas. Instead, the team engages in multiple conversations to understand the product vision, its origins, and its evolution over time.

“We simultaneously assess several key factors,” Rheinboldt stated. “We observe team dynamics and how the founders interact. We also gently challenge them with rapid-fire questions or by focusing attention on one individual to see how the others respond. Our goal is to understand the team’s cohesion and to determine how we can provide the most effective support.”

This approach is designed to facilitate swift investment decisions. Furthermore, the increased funding allows the team to not only invest in a greater number of companies but also to provide larger investments to individual startups.

Image Credits: APX

“We aim to make more substantial investments in startups at a very early stage,” Hungerhoff said. “Historically, we’ve employed a non-dilutive, pro-rata follow-on strategy with most of our portfolio companies, and we intend to continue this practice. Looking back, we’ve consistently participated in equity rounds with pro-rata investments or more. However, we’ve now developed a strategy to deploy significantly more capital – up to €500,000 – in the initial phase for our fastest-growing companies.”

The team observed that portfolio companies typically secure a small pre-seed round from APX and other investors, with APX generally acquiring a 5% stake. These founders would then typically seek extended pre-seed or seed funding shortly thereafter.

“We often felt we were missing opportunities when observing these companies secure significant funding rounds,” Rheinbolt explained. “While we were pleased to be able to make a pro-rata investment, we realized we could have provided a check earlier, potentially completing the round in a shorter timeframe and increasing our stake from 5% to 7%.”

Reflecting this renewed focus on long-term support, APX has eliminated the 100-day program. However, the team remains committed to providing hands-on guidance, and anticipates that the growing network will foster peer-to-peer learning among founders. “We are now recognizing the value of this dynamic,” Hungerhoff said. “For instance, a company we invested in two months ago is now seeking advice on an angel round and can benefit from the experiences of another team member, rather than relying solely on my past experiences.”

The team also prioritizes building a strong community, currently encompassing founders from 20 countries. The COVID-19 pandemic has necessitated a shift to online interactions. Prior to the pandemic, APX frequently hosted events in its offices to encourage the serendipitous connections that often spark new ideas. Looking forward, the team believes in the continued value of in-person meetings, while acknowledging that not every company needs to relocate to Berlin, but could instead visit periodically.

Bonus: Here is Hungerhoff’s latest album with St. Beaufort.