On June 8 2018, TechQuartier had the great opportunity to speak with the founder and CEO of Clark Germany GmbH, Dr. Christopher Oster. In the interview, Christopher gave TQ—and our startup community—some of his insights on what it takes to become a recognized and successful startup.
Originally from the Rhein-Main region, Christopher began his professional career in financial consulting prior to starting his own company. His first startup experience relocated him to Berlin where he worked as a co-founder and COO of Wimdu, a competitor to Airbnb. During his time at Wimdu, he actively assisted the company with international expansion. In the year of 2015, he came back to Rhein-Main to brainstorm ideas for a new venture. This is when the idea and development of Clark began to take shape.
Today, Christopher is recognized as the founder and CEO of Frankfurt & Berlin-based insurtech startup, Clark. The company utilizes a “robo-advisor” that work on providing solutions to customers with regards to insurance matters. “[Clark] is the go-to platform if a person wants new insurance, wants to switch their existing insurance, and lets customers speak to experts,” he explains.
Frankfurt’s corporate culture as both strength and inhibitor
Clark’s success is often given as an example by fellow Frankfurt fintechs when it comes to the topic of creating local scaleups. In relation to the upcoming release of Startup Genome’s ”Frankfurt Startup Ecosystem Report”, we asked Christopher if he believed in Frankfurt’s potential as a world-renown startup ecosystem.
“Yes, I would say so…” he says, “[Frankfurt] has the industry know-how and its founders definitely have lots of professional experience.” While those elements are praiseworthy, Christopher is also quick to point out that founders with a lot of experience also bring in years of established corporate culture, which may mean certain difficulties when it comes to coping with the pace of a startup business. This engrained corporate mentality might inhibit the risk-taking ”hustler” persona often associated with startup founders which could, in part, explain the relatively low number of startups in Frankfurt.
When questioned about the reasoning behind Clark’s dual HQ in Frankfurt and Berlin, he described it as a matter of finding suitable talent. “The talent is not all found in one location,” he reasons. In a separate interview, TechObserver asked another startup why they were based in both Berlin and Frankfurt, which was explained by the fact that Berlin is the seat of government (proximity to political decision-makers), and Frankfurt was presented as the seat of regulators and many other client headquarters, especially useful for B2B startups. ”That is a perfect example of the corporate mindset I was referring to earlier” said Christopher. ”If you ask any startups in Silicon Valley where they want to set up shop, the last thing they will consider is if they are close to regulators or politicians. They will go where the talent is!”
The next generation of founders
A recurring theme in the Startup Genome report focused on the lack of entrepreneurship ambitions in students and young graduates in Frankfurt. There is a common disinterest, or perhaps awareness, in seeing life in a startup as a viable career option, so we asked Christopher if he had any possible explanations for this. He simply replied, “There is a lack of the proper mentality,” he said. ”The local business culture is showing signs of opening to startups, but perhaps the message doesn’t resonate enough yet with graduate students.” In Frankfurt, the hypothesis goes that there is a general “risk-averseness” in business decisions, either when it comes to students launching their own companies, or in the seed-stage of funding up-and-coming companies. This is unfortunate because as Startup Genome mentions, it is an important factor required to accelerate startup growth. As stated in the Startup Genome report, it is important for these students to be introduced to the importance of risk-taking as part of the startup journey, if there is to be genuine hope of having more of them pursue entrepreneurial endeavors in the future.
VC and financial levers for scaleups
As for investing and funding, Christopher emphasized that reinvesting locally is crucial for an ecosystem to foster the emergence of more startups. He described Berlin in particular as a “big family” because of local investors giving back to businesses as an effort to succumb to the modern, young generation of startups that is the future. Founder of Rocket Internet, Oliver Samwer, earned millions in returns and managed to pump a lot of money into the system which was reinvested in the startup network, which contributed a great deal to the strong support system that they maintain.
Christopher further explained that angel investment is very common in Berlin, and that there are over 200 angel investors in the city who know and work together to assist startups through their growth. However, the investors that a startup chooses most be chosen selectively; established corporations, despite being known, are not necessarily the most appropriate choice of investor as they do not have the pure entrepreneur mindset that is required within the startup community.
- Clark has recently raised a $29 million USD round, which was led by two Canadian venture funds; WhiteStar Capital and Portag3, a fintech-focused VC back by one of Canada’s richest families. “German scaleups rely a lot on international investments” Christopher admits. ”It’s not that Germany doesn’t allow for series A or series B funding, and we certainly do have a lot of wealthy individuals and families here, but they don’t yet see tech startups as go-to option to invest large sums. So when it comes to larger rounds, Germany is not there yet.” This supports the view that more local success stories are needed to create an investment culture where risk is accepted, and where proven scaleups showing strong signs of scalability will create FoMO for investors now only willing to tag along deals, instead of leading them. This is why the arrival of new players, for example the Silicon Valley Bank, might help generate some momentum. ?Large investors are crucial allies for scaleups, and geographical and cultural proximity is always a plus. If an ecosystem gets better at creating scaleups and even unicorns, it should also be able to bankroll their growth and invest in their success.
Our final question to the CEO of Clark was in regards to his recommendations for startups and local initiatives and hubs, like TechQuartier, for the future. “It is important to have a crystal clear vision,” Christopher advises. “Acceleration initiatives like TQ should be laser-focused on how to get young startups across the line, say to a Series A round. That could be your KPI for every startup that walks in. ” he said. ‘’Of course, having a dynamic community and organizing meetups is also very important. It should be facilitated, but it will also emerge quite naturally as the ecosystem progresses.’’