Florian Fritsch explains how he builds up companies as an investor and sells them for 300 million.
Mr Fritsch, you are an investor and business angel. You founded your first company in Germany at the age of 16. How did it come about?
Florian Fritsch: After graduating from high school, I trained as a paramedic and then founded a patient transport company near Lake Constance, but before that I had been an entrepreneur since I was 16. Because I built a building for the company, I came to the real estate business rather by chance. I started to invest in real estate projects and at the same time I started working with young entrepreneurs. For 15 years now, I have been working as a business angel or investor, helping young founders to turn ideas into profitable business models and turn their visions into reality.
You now control a part of your companies from Liechtenstein, namely Vaduz. Why?
One of my first co-investors was a Liechtenstein citizen. In 2007 we started with a desk in an office in the Städtle to manage our own assets. We appreciate the short and quick distances in the country, which is why we have now also located part of our real estate company Gropyus, which produces in Germany, in Liechtenstein.
They also invest in Swiss and Liechtenstein founders. However, one of your most successful investments was the Berlin IoT start-up „Relayr“.
As an industrial company, the question today is not whether to go digital, but when. In 2014, we helped to provide the company Relayr with capital. Relayr is active in the field of Internet of Things and in this context offers a platform in which the data of devices and machines merge. Various processes can be monitored using Relayr’s software. With the help of Big Data it is then possible, for example, to make very precise statements about the probability of equipment failure. An example of the business model is a company that provides its customers with machines not by selling them but in the form of a service and bills per metre of produced goods. As a result, the added value is twice as high as if the machine had been sold directly to the customer. I brought an American investor on board who has co-financed Google and Facebook, among others. We sold Relayr to the insurance group Münchener Rück in 2018 for 300 million dollars.
They have also already invested in a completely different industry. This involves food deliveries. How did this come about?
Yes, that was Delivery-Hero, a delivery service that started in Germany with just a few orders. Years ago I had a premonition that customers would increasingly want to order their food at the push of a button or with a click. In the first year, the orders could still be counted on several hands. Today, the company employs almost 25,000 people and in 2019 it processed 666 million orders in 46 countries – in the meantime, the orders are almost three million per day. To reach this size, we pursued a buy and build strategy and acquired similar platforms in other countries. Once our technology was much more efficient and reliable, we transferred it to the acquired platforms. At that time, I invested 50 million euros with two other investors. I was lucky to meet great entrepreneurial personalities who work hard and are able to implement their ideas.
What makes you decide to invest in a start-up?
I like it when people come across a problem in their everyday life that they want to solve and in the course of this a great business idea is born. I am convinced that the exact same idea from two different entrepreneurs can lead to success or failure. The idea does not make a business. My motto is: Doing is like wanting, only more blatant. (laughs) If someone has put a lot of time into it and built up know-how, then I love it.
Let us talk about the Gropyus company. Do you build high-rise buildings from wood in the factory?
Yes. I built the Gropyus company together with Markus Fuhrmann, who also founded Delivery-Hero, Philipp Erler, who was the head of technology at Zalando and realised the logistics centres and robotics programmes there, and other co-founders. As in the automotive industry, we manufacture with robots in our own factory. The wooden houses are finished in a few weeks. Construction costs and time can thus be planned. Thus a frequently occurring shortcoming in the construction industry is solved. At the moment we are at three days per floor. Meanwhile 160 employees are already working for the company. The annual turnover is 20 million euros. We have already invested a double-digit million amount in Gropyus with our Family Office.
Interview: Dorothea Alber
Full (german) article