Bauer Media is launching a venture capital fund and plans to invest €100 million in start-ups and young technology companies over the next 10 years, but don’t hold your breath for a wave of investment in media businesses just yet.
The fund, called “Bauer Venture Partners” is being jointly established with “experienced venture capital expert Thomas Preuss.”
Bauer’s press release contains all of the usual financial PR-speak, but says that the company is on the lookout for “highly scalable digital business models in Europe” and has a “stage-agnostic approach without focusing on any specific phase like seed, early-stage or growth investments.”
Preuss, who has experience working with business models in the digital sector, has already mentioned the fund will focus mainly on software, and made reference to “ad tech, fintech, media, health, etc,” according to TechCrunch.
If you can’t beat them, invest
It’s the classic “if you can’t beat them, invest in them” approach that Bauer are adopting here, with the idea being that not only will certain investments yield new revenue streams to prop up the ailing publishing arms of the business, but “access to new technologies, teams and innovations in the digital field” will also strengthen Bauer’s core offerings at some point down the line.
Bauer evidently has its experimentation hat on – in the last three months it has both launched and cancelled its football stats email project, The Equaliser, for example.
But it looks like this VC fund won’t be used for further Trinity Mirror-style digital experimentation, rather the more lucrative areas of ecommerce and technology.
It’s a strategy familiar to German publisher, Axel Springer, which has transitioned to a self-styled “digital shareholder” and has acquired over 190 companies in order to create a sustainable digital company, chief technology officer Ulrich Schmitz told TheMediaBriefing at Digital Media Strategies 2014 back in March.
Finnish publisher Sanoma has also gone down the investment route, founding Sanoma Ventures which funds startups both for revenue gains and to speed up the process of innovation, as director Herman Keinhuis told the Digital Innovators’ Summit in Berlin earlier this year:
“Technological change is growing faster than organisational change. The bigger and more complex as an organisation you get, the slower you get. Technology is not slowing down.”
“Investment reduces cost of experimentation and it increases the speed. We don’t know what the future will bring, so you have to experiment a lot.”
The Guardian is also expected to be another player in this area, having sold its stake in AutoTrader publisher Trader Media Group for some £600 million and now sitting on a cash pile of a reported £1 billion, at least some of which it is expected to invest.
Given its trust fund-backed commitment to good journalism, the Guardian is the only one of these examples that you would expect to be interested in financing media startups. Then again, it could easily decide to use that money merely to prop up its core brand.
An American game
The media startup landscape is generally dominated by US players – First Look Media, BuzzFeed, Business Insider, which is in partly due to the size of the American ad industry attracting investors to US media startups, but also due to the fact that the UK media landscape packs a lot more into a smaller space – there’s a lot of competition.
Bauer and Preuss obviously think there’s scope for clever investment in the European startup market, though the odds of them going for a similar bet on media businesses to pump their money into look low.
Image via Flickr user Wendy Hollands used under a Creative Commons license.