He is probably the best-known startup financier in Austria and was honored in 2023 for his life’s work as Austria’s most important business angel of the year: Hansi Hansmann. Not only in Austria, but also throughout Europe, he is a significant investor and his Hans(wo)men Group will continue to support promising young companies in 2024. And it is the year 2024, which we talked to Hansi Hansmann about, which will be very exciting with a difficult financing situation, a possible interest rate turnaround and a bunch of important elections.
Hansi Hansmann: “Cash will be king in 2024”
For those who don’t know you (and there are certainly few of them), your LinkedIn profile still says “Currently Not Investing”, but that’s not true, is it?
Hansi Hansmann: No, that is not correct. Even though we are investing quite a lot at the moment, I left it there because I get enough deal flow from other sources.
Give us a very short recap of the year 2023. That was a year marked by crises. How did it go for you and the Hans Woman Group?
Overall, I’m actually quite satisfied. We made, I think, five or six new investments. We have already supported many companies from the portfolio, sometimes we had to and sometimes we were happy to do it. The portfolio is now over 50 companies in total and includes everything from very mature companies to many young companies. Only two or three companies left, so to speak, but in these cases that would have happened sooner or later anyway because the business model simply didn’t fit as originally thought.
So, unlike some others, you haven’t lost faith in startups?
Quite the opposite! I believe in startups more than ever before because I am simply convinced that we are still only at the beginning when it comes to digitalization and that there is simply even more potential with the new possibilities and new business models that are opening up through AI there is. Although these are not the best of times right now, when it comes to fundraising, it is a good time to start new companies. Because companies need relatively little money in the beginning. It takes them one to three years to find their product market fit and be able to raise larger rounds. And that’s why now is the right time to start. And I am optimistic that by 2025, or at the latest 2026, we will be back to the point where there will be enough money to set up good seed rounds as well as Series A and Series B.
It sounds a little like 2024 would also be a year of new beginnings.
I actually think it will be a very difficult year. I fear that there will be a lot of startups that are now running out of money and will have to raise. That means there will be a lot of jockeying for a slightly smaller amount of money. The interest rate turnaround hasn’t really arrived yet and the major trouble spots are still there. There is the Ukraine war, there is the Middle East war, the elections are coming and there is a danger that Trump will become US president again. These are all rather bad omens. But of course things can quickly go the other way. This should never be ignored.
But you also said to us in an interview shortly before Christmas that it would also be a year of great opportunities. Who are these opportunities for and for whom are they not?
Cash is king, I would say. If you have a lot of cash, there will be a lot of opportunities. Because many companies that are now running out of money will look for alternatives to financing, for example an asset sale or a merger with a suitable company. And this is where those with cash have many exciting options. There will be a market shakeout or consolidation.
AI will continue to be on everyone’s lips in 2024. What will happen next and are there many AI companies in your portfolio?
In fact, the majority of my companies in the portfolio rely on AI. Some have always done it and others have had to deal with it intensively in the last year. It turns out that AI can make the business model faster, better, more efficient and cheaper. Companies have to do this because otherwise they will be overtaken. And this doesn’t just happen in my portfolio, but everywhere. But there are also a few companies that need AI less, for example in the hardware sector.
There are many ClimateTechs in the hardware sector, among other things. For example, Northvolt, the battery manufacturer from Sweden, has raised tens of billions of euros.
I have a few hardware startups in my portfolio that are doing great. One of them is Tractive, which offers a GPS device for the dog or cat collar to track pets. The train goes over there. Another is Journi, which offers great photo books. Both have developed really well, especially in the last year.
Until two or three years ago, many startups also relied on the SaaS (Software-as-a-Service) concept in the B2B sector. Is this still a good idea or is there oversaturation here?
Personally, I’m not a huge fan of SaaS startups. I looked at my track record a few months ago and interestingly, all of my big exits are B2C based and not B2B SaaS. But the need is still there among other investors, albeit somewhat muted.
Let’s talk about your investment company, the Hans(wo)men Group, you always hold meetings where countless well-known Austrian founders gather. Internationally, people often talk about the PayPal Mafia or the Skype Mafia. Is the Hans(wo)men Group also a mafia (in a positive sense)?
Certainly, because there is already a very strong and good cohesion within the group. The members support each other, not just at the workshops and regular meetings. We also have a shared Slack channel where we exchange ideas. If someone has a major problem, they post the question in the Slack channel and usually get several answers within half an hour because someone else in the portfolio has already gone through this exact problem. In the meantime, we also have sub-groups that have invested a relatively large amount in Spain in the last two years, we already have six Spanish portfolio companies and we also hold meetings in Spain twice a year.
You have very special relationships with Spain, that’s basically where you built your fortune and your entrepreneurship, right?
Yes, I lived in Madrid for 20 years and still have a residence in Spain on the coast. We also have an investment manager based in Barcelona. That’s where we’ve mostly invested so far; Barcelona has a great startup ecosystem with much more diverse founding teams than in Austria, for example.
Another trend in recent months in major financing rounds in Europe, including at GoStudent, is debt capital. Banks, for example, provide loans here. Is this a temporary trend because the big VCs are a little more hesitant?
Debt capital has advantages and disadvantages; it is usually significantly cheaper than equity, but in principle it is only suitable for the growth phase. Because in the event of an exit, there must be enough money to repay debt capital and then still have capital left for the individual shareholders and overall costs. If the company doesn’t perform well, debt may take most of the exit money, leaving very little for shareholders.
There are a few “shining stars” in your portfolio in 2024. Which companies in your portfolio do you think we will hear the most positive things about?
Interestingly, there are a few companies that are virtually immune to recessions. This includes, for example, Tractive. I have to be honest and say that if I hadn’t read in the newspaper that we were in a recession, I wouldn’t have been able to tell from Tractive’s figures. There has been unbridled growth here since the launch in 2013. I’m sure you’ll continue to hear great things here. The situation is similar with Journi. Then of course there are companies like Storbox and Anyline, which are doing very well, even if they have been hit a bit by the recession.