TGFS to launch third generation fund in 2023
28 Februar 2023
Good news for founders and start-ups in Saxony: The TGFS is launching its third funds generation with a minimum of € 83 m (first closing). The fund was first initiated in 2008 by the Free State of Saxony (including ERDF funds) and Saxon financial institutions. In a nationwide comparison, the special significance of venture capital for the economic development of a region was recognised early on. Saxony’s Minister of Economic Affairs, Martin Dulig, emphasises: „Supporting start-ups at an early stage is a joint task of the public and private entities. The Technology Start-up Fund helps young, innovative founders to put their ideas into practice and to attract private investors. The experience of the two previous successful fund generations shows: Venture Capital is particularly helpful in the start-up phase and the challenging period until a product establishes itself in the market, enabling companies to successfully establish and develop themselves.“
A lot has happened since then: The TGFS has supported over 100 companies from the seed or start-up phase, making it an essential building block in Saxony’s VC scene, which has experienced a significant increase in visibility in recent years. Today, a well-functioning ecosystem exists, includingthe innovation platform futureSax, co-working spaces, incubators, universities, non-university research institutions and capital providers. With the TGFS, this development was significantly advanced by the Free State on the capital side. The growing attractiveness also results in further capital flowing into Saxony from investors. A third fund edition is, therefore, only logical to continue this successful paved path with the existing fund management — CFH Management GmbH, the investment companies of the Sparkassen Chemnitz, Dresden and Leipzig as well as Mittelständische Beteiligungsgesellschaft Sachsen mbH (MBG).
The current fund, with a target volume of up to € 100–125 m, is partly fueled by returns from the first fund generation. Therefore, it is not surprising that a proven circle of investors is coming together: in addition to the Free State of Saxony (including the European Regional Development Fund (ERDF)), MBG Sachsen and the Sparkassen from Chemnitz, Dresden, Leipzig and Mittelsachsen are once again on board. Currently, the fund management is also in discussion with the Sächsische Aufbaubank (SAB) regarding participation in the fund, which is also open to additional institutional investors.
The plan is to deploy the funds in for approximately 40 participants ranging from € 0.2 m to € 5 m per company. The focus remains on knowledge-based and technology-oriented start-ups with headquarters or operations in Saxony. The TGFS invests across all sectors, but the Free State’s innovation strategy serves as a guide for the relevant technology fields. In addition to mere capital provison, the fund accompanies the start-ups with know-how on their often challenging journey from inception to market maturity. In this process, the young companies can leverage the network and experience of the TGFS team.
Sören Schuster, Managing Director of TGFS, provides the following outlook: „We aim to continue investing early on to support start-ups along their journey, shape it with our experience, and contribute to achieving a level of maturity that attracts further investors. This benefits everyone involved: the start-up, which can continue to grow, and the Saxony region, as exciting companies emerge and establish themselves in the market, becoming attractive employers and further advancing economic development. We are pleased, as TGFS, to once again contribute to this.“
Press release of the Saxon State Ministry of Economy, Labor and Transport on the TGFS in its third edition: Link