Insight from a leading investor in European logistics climate tech – XPRESS Ventures

“We invest in founders, not in ideas,” says Matthias Friese, Founding Partner at logistics investor XPRESS Ventures. His passion lies in helping prospective founders create dream teams and uniting them with the networks they need to build their idea into a viable, market-changing product.

To Matthias, securing funding and investment is almost secondary for startups, instead, he’s a believer in carefully examining and supporting the process that leads there: he’s convinced that not every startup needs X-million euros to get the ball rolling, it simply needs access to the right infrastructure, experience and networks.

Matthias’ roots lie in the German Mittelstand – his family business was engineering. The ‘Mittelstand’ is comprised of small and medium-sized enterprises, often family-founded, with longevity in their industries and the in-depth knowledge and experience that goes with it. He’s always been impressed by this tier of the German business world in particular; he sees the Mittelstand as the German Silicon Valley – the players just don’t know it. The only problem? These companies often don’t have time or resources to innovate. If they do, it could take maybe 18 months to get an idea underway, and that’s hardly the pace needed to innovate in most industries today. Previously, innovation could take place over multiple decades; that’s no longer a luxury available today.

But what if the Mittelstand corporations and start-ups could unite to accelerate innovation? This concept gave birth to XPRESS Ventures, a Berlin-based Company Builder and Pre-Seed Investor, specialising in logistics startups across Europe with a focus on energy, climate and supply chain.

The founding principle is to take the deep industry knowledge of Mittelstand companies and the mindset of venture capitalists and act as the connection point for founders, opening the door to investors and industry networks at the same time. This initially involved a lot of moderation and mediation to foster an understanding between all parties, and there are still often difficulties in harmonising the mindset of logistics firms, which has been shaped by the challenges of the recent decades, with that of fast-paced startups looking for immediate investment.

But Matthias’ belief in the necessity of bringing different parties to the table and getting them to talk and join forces has paid off: today, Xpress Ventures supports startups through capital, an extensive network, and logistics infrastructure and expertise – thanks to their partnership with logistics heavyweight, Fiege Logistics, which boasts 150 years of expertise.
Xpress Ventures maintains that you don’t need a complete business and financial plan to gain investment, but you do need deep understanding of the market and its disruptability, the customer, and your USPs: “Do they understand customer problems?” says Matthias, “and not just the problems of the companies they plan to sell to, the end customer who’ll use their product?

The logistics sector may be the unsexy elephant in the climatetech room, but it is mission critical to bringing supply chains to net-zero: eight supply chains account for over 50% of global CO2 emissions, and decarbonising these would add just 1-4% to end-consumer costs for many everyday products, according to a World Economic Forum report. This is a huge and viable opportunity to cut emissions, and it starts with great logistics.

In the face of the climate emergency, Matthias and fellow XPRESS Venture Architect Ole Poppinga are stoically optimistic: their work with founders and potential solutions has led them to see plenty of cause for hope. “But the climate has no time for ego,” adds Matthias, “the time to act is now, especially if we’re all going to be living for longer, let’s make it in a liveable world – it’s not a nice to have – it’s mandatory.”

What logistics climate tech investment trends do you believe we’ll see in 2024?

This is particularly pertinent to Germany’s recently introduced – and not so snappily named – ‘Lieferkettensorgfaltspflichtengesetz’ or Act on Corporate Due Diligence Obligations in Supply Chains.

Matthias Friese: Countries like Germany are going to be moving towards role model status in terms of climate-friendly innovations. There’ll be an increase in collaboration across borders, including international borders right across Europe, to collectively put pressure on other countries to make impactful changes. Germany is only responsible for a small percentage of the total global greenhouse gas emissions, so its true power lies in being a role model.

What are some climate tech startups you have invested in?

Logistikbude: Logistikbude provides an innovative software infrastructure for efficient reusable system management, helping businesses reduce personnel and infrastructure costs. Their digital solution immediately optimises management of reusable objects, enabling up to an 80% reduction in personnel efforts, a 40% decrease in replenishment costs, and potential savings of 20,000 tons of CO2 emissions.

PaketConcierge: Today’s home delivery is highly inefficient for carriers, not fail-safe for recipients, and environmentally unsustainable. PaketConcierge makes people choose out-of-home delivery to pick-up points as a matter of principle and thus generates huge pooling effects in last-mile delivery. Their product is efficient for carriers, convenient for recipients, and sustainable for the environment. They have processed more than 40.000 packages and their carrier partnership model ensures a scaling potential of up to 340,000 pick-up points in Europe alone.

HomeRide: HomeRide is a RetailTech-Startup which runs a local commerce D2C-marketplace. By connecting local retail inventory and climate-neutral last mile delivery service in one digital place, HomeRide provides the next generation of on-demand consumer services. Consumers can place across multiple local stores and get them delivered the same day at a desired time. They only use electrically powered cargo bikes to collect and deliver purchases.

XPRESS Ventures Team

How should start-up founders prepare for investment and pre-seed rounds?

Matthias: You don’t need a perfect plan. Know your market, know your market size, know your competitors. It can be helpful to have a rough financial model for demonstration purposes. I’m especially interested in founders with specialist topics that they know in-depth, some very niche markets have huge potential. I also like founders who are bullish, although a dash of humility and understanding of what you bring to the table and where your skills lie, definitely don’t go amiss.

For example, we invested in a startup offering a SaaS solution for changing loading carriers (like pallets). In the European logistics sector this is often still done by pen and paper; but this startup wants to make it as easy as online banking. Xpress Ventures, via Fiege, was able to offer market access. The founders really know their market – they had even written a PhD on the topic of pallets.

What support does Xpress Venture provide early stage companies?

Matthias: We help companies to not make the same mistakes we made – though you should make mistakes – I’m an advocate of the ‘fail forward’ attitude to business. Xpress Ventures’ USP is that it’s able to dip into its own, extensive network both to actively help with hiring the right people and in terms of reaching the right customers. The firm helps with everything from hiring and company structure to legal and sales. Plus, we try to teach them to see into the future to highlight the importance of being one step ahead and envisioning a changing market and conditions.

What gives you hope for the future?

Matthias: My hope for the future comes from people. The richest people in the world are the ones who will end up solving our climate problems – it’s all a question of money. But that’s positive because some of these rich people are human – they have kids and I hope they will invest with their future generations in mind, realising that their children could be living with the consequences if they don’t.

Ole: I consider myself a climate optimist. I believe in market-driven solutions and the power of innovation and entrepreneurship. The market for sustainable technologies is big and it’s only growing, so it’s rich with opportunities to invest and see returns. Entrepreneurship is possibly more powerful than politics, for the challenges we face can’t be solved with words alone.

Do you have any rituals that keep you going?

Matthias: I’m a more night owl. I like to curl up in my private office and work through the night on new ideas over some good blues.

Ole: A cold shower – it’s energising and helps me to stay focused and motivated throughout the day.

Do you have a favourite quote or motto?

Matthias: Fail forward.

Ole: Never know ’til you go.