Klaus Hommels, one of Europe’s most prominent venture capitalists, has invested €1 million (£720,000) in a German technology hub called “Factory Berlin,” which counts SoundCloud, Twitter and Uber among its tenants. He has also joined the board.
Hommels, who is listed on the Forbes Midas List as a leading global tech investor and whose high-profile investments include Facebook, Skype, Airbnb, Spotify, and King, will also join the board of Factory Berlin, which is also known as “Factory.”
Earlier this year Hommels was announced as the head of the new €350 million (£250 million) Lakestar venture capital fund but Business Insider understands that this investment is coming out of Hommels’ own pocket.
“I’m investing in Factory Berlin because I’m committed to the tremendous potential of the Berlin tech ecosystem, and I believe Factory is lifting this potential by creating a powerful community for both the new and old economy,” said Hommels in a press release. “The Factory connects space, services and innovators in very exciting ways.”
Speaking to Business Insider when the Lakestar II fund was announced in August, Hommels said he believes that Berlin will become Europe’s leading technology city due to its low cost of living and its position on the European continent.
In Berlin, a developer can have a decent apartment for €300-350 [£217-253], and he has a nice life. So the average salary of a technology person that you have when you start a company is something like $US38,000-40,000 [£24,200-£25,400] in Berlin and $US56,000 [£35,600] for London. If you take rental space, again, way cheaper in Berlin than in London. If you really bootstrap something it is so much more unbelievably cheaper to get to a certain level in Berlin than it is in London.
Furthermore, all the talent from Poland and Hungary, it’s very easy for them to go by train to Berlin and then live in a cheaper city than to fly to London to be in a very expensive city.
Factory aims to match tech giants with early stage startups, while providing a community that will help entrepreneurs to grow their businesses. There’s also an emphasis on bringing old and new economies together and encouraging them to collaborate.
Factory has done a good job of getting Silicon Valley giants to move in, but it has also been endorsed and supported by individuals like Google’s executive chairman, Eric Schmidt, who delivered a keynote at Factory’s opening in June 2014.
Factory has been expanding its physical footprint and the types of space it provides to companies since it opened. In May, a coworking space was opened within the current Factory building, while work began in July on a new four-storey Berlin Mitte campus. Last month, the company announced Factory Kreuzberg, which is set to open in early 2016.
Udo Schloemer, CEO and founder of Factory, added: “Klaus Hommels is one of the world’s most accomplished investors. His experience and advice will be invaluable on our mission to build the premier innovation community in Europe. That’s why we are very happy to welcome him as both a shareholder and a board member today.”
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