German media giant Axel Springer is making a €30m investment in internet company builder Project A. It’s the latest heavy bet in Axel Springer’s transition to digital – and a vote of confidence for Project A as it nears the two-year mark.
The investment is still subject to merger control and cartel office approval. It follows the first major exit for one of Project A’s portfolio companies, online tire shop Tirendo, which sold to Delticom for €50m in September 2013.
In a statement today, Axel Springer Head of Electronic Media Jens Müffelmann said the investment would “close the gap between our strategic late-stage investments and our early-stage activities, amongst others in the field of performance marketing”.
Florian Heinemann, Uwe Horstmann, Thies Sander and Christian Weiss – three of whom are ex-Rocket Internet – set up Project A in January 2012 with backing from retail giant the Otto Group, which remains the leading investor with €50m in committed capital.
Project A is similar to fellow Berlin-headquartered company builders Rocket Internet, Team Europe and Epic Companies in that it both invests in companies and uses an in-house team of experts to set new ventures up. It’s so far financed about 15 teams, starting with online shops and moving into advertising tools and mobile apps.
Axel Springer, meanwhile, one of the largest publishing houses in Europe, is working hard to expand the digital side of its business, which for the first time last year brought in more annual revenue than any other operating segment.
Over the last year, as well as selling off regional newspapers, Axel Springer has sent executives to Silicon Valley, bought stakes in fitness app maker Runtastic, startup event hy! Berlin and social TV startup TunedIn (among other online businesses), and set up an accelerator programme in partnership with Silicon Valley tech centre Plug and Play.
Image credit: Flickr user Steve Snodgrass
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