Funding and Investment Hamburg

Compared to other federal states in Germany, there is a lack of financing options (public or private) for game start-ups in Hamburg. There is no specific funding opportunity especially for game start-ups existing in Hamburg, nor is there a special game incubator providing targeted support. VCs usually do not invest into risk markets such as game production, banks do not go into content financing due to insufficient knowledge of that particular business. Therefore, in many cases game start-ups in Hamburg are funded by family and friends.

However, some support programmes (in particular from the Hamburg investment bank IFB) offer game start-ups the possibility to apply for financial support. Difficulties of these grant schemes (e.g. InnoRampUp) occur – caused by a lack of innovation and technology-orientation that decision makers often see in game start-ups. Game start-ups often face high financing requirements, long development periods, challenging market assessment (because of producing a product that will be launched in the future when markets might have changed). More targeted support is on the way with a new founders grant scheme expected to start in late 2018, which concentrates on media and content-based start-ups.

Hamburg used to be the first German federal state to provide a decidedly prototype sponsorship that comprised a fixed budget within a fixed period. Meanwhile, this program has expired and does not suit the current market structures of game industry any longer.

According to game experts, production funding would be most desirable. Such a program should include: concept development, product production as well as marketing & sales. Especially marketing & sales is an essential asset for game companies and therefore must be systematically supported. During the last years, companies’ expenses per additional user have sharply increased. In order to achieve economic success, companies need to have a large marketing budget to gain strong visibility with a corresponding number of users. However, many marketing budgets are too small to enhance visibility and in addition, many companies even lack corresponding marketing skills.

Public funding

INNORAMPUP (IFB Hamburg)

• Who: innovative start-ups in general (in seed or pre-seed phase)
• What: development of market studies / implementation of feasibility analyses, development of strategies / business plan, market opening and growth strategies, search for partners / founding teams / employees / personnel recruiting, qualification training, development of prototypes and tests / implementation incl. production facilities, securement of rights / patent developments / patents, measures on marketability incl. building up of distribution structures; eligible costs: expenses on personnel, material (investment), expenses for qualification measures, marketing, external services, patents, travel, infrastructure and bureaus
• Nature: grant
• Size & conditions: up to 150,000 € per project, partial or full funding in certain cases more detailed numbers regarding co-financing?
• Geographical scope: City of Hamburg
• Time scales: continuous support, decisions every 6-8 weeks
• Other: around 10% of all applications are successful

GAMECITY:HAMBURG

• Who: game start-ups as a specific part of the creative industry
• What: Non-monetary support: gamecity:Hamburg meetings and night events, games conferences in Hamburg, office spaces for game startups, marketing and lobbying, networking platforms for regional startups, joint stands at important fairs
• Nature: Non-monetary support
• Size & conditions: not provided
• Geographical scope: City of Hamburg
• Time scales: continuous support
• Other: Network of about 2,000 participants, part of the “Hamburg Kreativ Gesellschaft”, an institution of the city of Hamburg; was launched in 2008

STARTUP-GRÜNDUNGSSTIPENDIUM (IFB Hamburg, Hamburg Innovation GmbH (HI))

• Who: innovative and new digital start-ups; their innovative products and services; single founders or founders team – start-up has to be in the Pre-Seed or Seed phase
• What: personnel, material (investment), patents, pre-tests and diverse fees: support for material costs, pre-tests, fees, development of business ideas / business plans / business strategies that are competitive, development of prototypes for market launch, development of co-operations with universities and research institutions (especially with the Hamburg Innovation GmbH HI), in addition continuous support through coaches of the IFB
• Nature: grant
• Size & conditions: 2,500 € per month and per person for max. period of 18 months, for a founders team max. support of 75,000 € for the max. period of 18 months, there has to be significantly different from competitors and there has to be an enormous risk during the conception and market launch period caused by the novelty; 2018: 1.6 m €, 2019: 2.6 m €, 2020-2022: 3.2 m € granted for applying start-ups.
• Geographical scope: City of Hamburg
• Time scales: support scheme is planned to be set up on 01. April 2018
• Other: The scheme is dedicated to start-ups that have an innovative digital product or service. The focus lays on grants for media or content-oriented start-ups. The idea is to foster start-ups that does not fit into the existing schemes of the regional or national level. Especially concerning the InnoRampUp many start-ups has problems to receive a grant, because InnoRampUp is mostly for high-tech start-ups

Private equity funds with interest in video games

IVENTURECAPITAL GMBH

• Who: young, aspiring online companies: information technology, Web, games, and media companies; potential portfolio companies should exist for at least 1 to 2 years and show first achievements, which do not necessarily have to be profit
• What: Investment sectors: digital production of online portals, mobile apps, online games, online marketing services, search engine optimization; Investment stage: early stage and later stage; Provided services: online Marketing, KPI analysis and benchmark, advice on how to select and use billing and payment providers, joint press and trade fair activities, utilization of the investor’s resources such as bookkeeping, HR, office space, assistance in the set-up of user support
• Nature: private equity fund
• Size & conditions: Investment size: up to 1.5 m €
• Geographical scope: global, but mainly Germany and USA
• Time scales: n/a
• Other: founded 2011 in Hamburg, supported projects: Kamicat, Games.de, farblut, MobileBits

Public equity funds with interest in video games

INNOVATIONSSTARTER FONDS

• Who: small (not listed, less than 50 employees, annual turnover below 10 m €), innovative and young (not older than 5 years) companies
• What: support of implementation and advancement of innovative business models
• Nature: public equity fund
• Size & conditions: Up to 0.6 m € can be invested in every financing round (0.15% share in the business, whereby the fund will hold a maximum of 50% of the supported company), whereby the overall sum per start-up cannot exceed 1 m €; fund absorbs open participations, in some circumstances complemented by subordinated loans, an intensive coaching complements the financial support
• Geographical scope: City of Hamburg
• Time scales: continuous support, several months for the complete procedure
• Other: Volume of 12 m. € which is to be invested in five years, around 10% of all applications are successful, particularly hard for game start-ups since the programme is focused on innovation and complete novelties

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Status: 01/2019