Merantix has created an AI campus in Berlin for a lot of money. Founder Adrian Locher (r.) tells us in an interview how it came about, what the advantages of the campus are and why they are going their very own way with their company Merantix.
Adrian Locher then stands out once again even in the start-up scene. Born in Switzerland in 1982, he built up and sold DeinDeal, among others, and now has an investment vehicle with Merantix that wants to be neither a company builder nor a VC fund. The company's first projects are already underway, but Locher is thinking bigger. That's why Merantix has rented an office building in the middle of Berlin and converted it into the AI Campus; the doors will open as early as April 1.
Mr. Locher, you are putting your own artificial intelligence campus in Berlin Mitte, a pretty daring project for a startup financier. How did you come up with the idea?
The idea first came to us two years ago. At the time, we moved for the fourth time in three years, simply because we had grown too fast. We then found an office with 600 square meters, at Oranienburger Tor and with a garden. All our companies are under one roof there. We noticed there that the community between the teams was very lively, that there were meetings, lots of exchanges and many conversations in the coffee kitchen, what we call "coffee bar chats" in the US. And then we thought, why not think this ten times bigger?
Now it's 5,200 square feet. How did the planning go?
We started in mid-2019, looking very much at where we could create large collaboration spaces. The classic office where you can work in peace, that's everywhere. But we want to create collaboration and that's why we helped develop and implement the building in this way. The AI Campus opens on April 1.
How well booked are you?
About 70 percent. I think that's a very good sign, especially in light of the ongoing lockdowns and the pandemic in general: A lot of organizations and companies are thinking long-term and big in terms of the AI ecosystem, despite the current challenges. We also have a lot of viewings every week, so will be taking up the last few spots over the summer.
What have you invested?
We've invested a seven-figure sum. With 5,200 square meters and the average price per square meter in Berlin-Mitte, you can certainly do the math. We rented the building directly for ten years and want to use it to strengthen the AI ecosystem. We could have waited for federal or state funding, but then the AI Campus would not be there today, not in three years, and not in five years. Now we're in talks to see if the politicians might get involved. So we're doing it differently than the federal government's AI strategy: we do first and then we talk.
With such an investment, start-ups should probably also bring enough money for rent. What else?
The rent is not particularly high because we rent the space at cost. We don't want to be real estate investors, but above all we want to create an ecosystem for artificial intelligence in Berlin. That's why all companies that want to move into the AI Campus have to work in the field, of course, and they have to be interested in exchanging ideas at meetings and events. They shouldn't be shy either. There will also be areas where visitors can touch or experience artificial intelligence. This building is meant to be a showcase for AI.
At Merantix, you deliberately call yourself Venture Studio. Why?
I was looking around Europe, Asia and the US for investor models after selling my last company in 2015 and that's when I noticed the Studio model, which we then implemented. We are too different from the traditional VC fund and also from the company builder. What worked for startups in e-commerce, we don't see for AI companies: just pumping money into a good idea is not enough. Over the years, we have built up a network of partners that supports our founders with research, data sets and pilot projects.
How is that different from what you do?
We invest much earlier, but don't build a team around an idea until it has been successfully tested in initial pilot projects. The ever-evolving ecosystem is designed to offer individual startups - and this is crucial - long-term access to know-how, technology, space and capital. We then also look for partners and companies that might be interested in such an idea and help with follow-on funding. So far, we have financed pre-seed and seed from a fund of 25 million euros. From the Series A financing round onwards, we will bring in external investors.
You started in 2016 and have spun out just six companies. Where are the problems?
We deliberately took our time in the first three years. We wanted to see what worked and what didn't work. We iterated our process several times and only when we were sure did we spin out faster. In 2020, we spun out two startups, and this year we'll have four or five.
What are you not doing today that you did in the beginning?
We don't build the team and the company until we've spent twelve months discussing and validating the idea with the founder. That means we know that there is concrete interest in the idea from potential customers. Only then do we get started, which is much more cost-efficient than building up a large team each time and then having to turn around.
How many ideas do you discuss each year?
More than a thousand.
How many make it to the incubation stage?
Last year, there were four.
That's 0.4 percent. Where do the ideas come from?
On the one hand, we develop ideas with external founders who bring along impulses from their own research work, from our network, where we also work closely with universities, and from our Merantix Labs, which sets up AI projects with medium-sized and DAX companies. The opportunity may look small, but we are very open to new ideas from founders.
Thank you very much for the interview.
About the person: Adrian Locher is co-founder and CEO of the venture studio Merantix. Born in Switzerland, he studied at the University of St. Gallen (HSG) and has been active as a serial founder and angel investor in Europe and the US for more than 15 years. Prior to Merantix, he built DeinDeal. Adrian Locher's investment portfolio includes a renewable energy company, a booking provider and a financial automation company.
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