Further capital for sustainable technology innovations in Hesse

bmh launches fourth fund of the "Technologiefonds Hessen" family. First bmh fund with BaFin approval as an alternative investment fund (AIF). Target volume of 30 million euros, of which 23 million euros have already been secured in the first closing. Consideration of ESG criteria as a central component.

Wiesbaden, October 17, 2023 - bmh Beteiligungs-Managementgesellschaft Hessen mbH has launched Technologiefonds Hessen IV (TFH IV) to finance innovative technology start-ups and smaller technology companies in Hesse. This expands the TFH fund family, which has been in existence since 1998. TFH IV is the first fund to be approved by the German Federal Financial Supervisory Authority (BaFin) as an Alternative Investment Fund (AIF). The target volume of this fund is EUR 30 million, of which EUR 23 million has already been secured in the first closing. The anchor investors include the State of Hesse, Helaba, WIBank and DZ Bank.

We want start-ups that also gear their business idea towards sustainability to receive the appropriate financing. State funding of EUR 10 million will be augmented by EUR 13 million from the banks involved to date. Young companies can thus bring innovations to market and also test unconventional approaches.

Michael Boddenberg, Minister of Finance, Hesse

The Hessen Technology Fund IV will serve as an important source of financing for innovative technology companies in Hessen. These companies are characterized by sustainable business models and are in various stages of development, from the late seed phase to the Series A round. The fund is expected to provide a total of €30 million to the Hessian technology sector, with €23 million already successfully raised in the first closing. This is the first time that bmh has managed an alternative investment fund with BaFin approval, which opens up the possibility of attracting additional private investors. The usual investment range of TFH IV is between 500,000 and 2 million euros, with a planned investment period of usually five years. The fund itself has a term of ten years, with an optional extension for a further two years.

The further development of our site towards a sustainable and climate-friendly economy is our most important task.

Tarek Al-Wazir, Minister of Economics of Hesse

The Hesse Technology Fund IV will take ESG criteria (environmental, social and governance) into account both in the investment process and in portfolio management. Each potential portfolio company will be screened for ESG risks during the due diligence phase, using the 17 Sustainable Development Goals as a basis for assessment. Companies that do not meet the minimum score will not receive investments from TFH IV. For the startups that meet the established criteria, ESG workshops are planned over the course of the investment period. These workshops will be conducted in cooperation with experienced sustainability consultants to promote the integration of ESG principles into the companies' business practices.#

We have been observing the trend towards ESG-oriented business models, especially among technology start-ups, for some time now, and this trend has increased significantly again in the last year. With TFH IV, we are now adapting our support to the changing needs of the Hessian technology sector

Jürgen Zabel, Managing Director of bmh

Not exclusively according to ESG criteria

At the same time, however, Dr. Steffen Huth, Managing Director of bmh Beteiligungs-Managementgesellschaft Hessen mbH, emphasized that bmh will continue to support the broader technology sector. This means that the fund will not exclusively target companies that are directly focused on the "green transformation", but will also offer support to other conventional technology companies. In this way, bmh will meet the needs of a wide range of companies, including those that are not primarily focused on sustainability but nevertheless offer added value in the technology industry.

The launch of the Hesse Technology Fund IV underscores bmh's commitment to supporting sustainable technology innovation in Hesse and providing critical funding to the technology sector.