Deutsche Boerse launches platform for start-ups to woo investors

By Caroline Copley

BERLIN (Reuters) - Stock exchange operator Deutsche Boerse (DB1Gn.DE) has launched an online platform to connect growing start-ups with international investors, as Germany seeks to plug a shortage of late-stage funding that is stunting innovation.

Concerned that German industry risks falling behind in a digital age, Chancellor Angela Merkel's governing coalition is keen to promote start-ups and smooth the path for initial public offerings (IPOs).

"At the moment there's a big, gaping hole for growth financing," Deutsche Boerse Deputy Chief Executive Andreas Preuss said at the launch of the platform in Berlin on Thursday.

Twenty-seven start-ups had registered for the "Deutsche Boerse Venture Network" at the time of the launch, including online furniture retailer Home 24, online glasses company MisterSpex and chauffeur start-up Blacklane, in which German carmaker Daimler (DAIGn.DE) holds a stake.

Deputy Economy Minister Matthias Machnig described the platform as an "important instrument" and said the aim was to attract at least 100 companies. To qualify, start-ups need to have proven initial business success and meet certain criteria, such as growth in annual revenue or net profit.

The platform is not open to the public, in terms of investors, and targets venture capital and private equity firms. The 42 investors currently registered on the platform include Accel Partners, Earlybird and the part state-owned High-Tech Gruenderfonds.

Although investment in German start-ups more than doubled to $1.74 billion (1 billion pounds) last year, this was less than the amount raised by U.S. car-sharing company Uber alone. In contrast, U.S.-based start-ups drew $49.39 billion, according to Thomson Reuters data.

While young German companies are able to access seed and early stage funding rounds fairly easily, financing for later rounds, which are often the prelude to market listings, remain few and far between.

Bernhard Rohleder, director of IT sector lobby group Bitkom, said growth-capital remained the biggest challenge for German start-ups with many still struggling to access amounts of more than 1 million euros ($1.1 million).

"Instead of growing and turning their start-up into an international success, in the end they often end up selling their company early," Rohleder said.

(Reporting by Caroline Copley; Editing by Pravin Char)