There’s a new investment player in the largest city on the Rhine River. America’s Riverside has acquired two German venture capital firms and opened offices in Cologne.
Riverside hopes to establish an American-style revenue-based financing mode. It’s initially targeting smaller business software providers for investments between EUR one and five million.
“After twelve years as a venture capital investor, I was tired of turning down start-ups just because they couldn’t present hypergrowth,” Riverside partner Christian Stein told the Internet platform Finance FWD. “There still a big funding gap for companies that can’t get loans from the bank and don’t want to take on venture capital or can’t get it on good terms.”
The Riverside model foresees companies paying back one-and-a-half to two times the sum invested when they turn a profit – the normal margin in the sector is three to four times the investment sum, according to Finance FWD.
Stein was previously the managing director of Coparion, the EUR 250-million co-investment fund backed by the German Ministry for Economic Affairs and Energy and German state-owned economic development bank KfW.