David Rosskamp, the managing partner of Berlin-based Magnetic Capital, believes that world-class venture capital is an artisan craft, contrasting it with the industrial-scale operations of larger institutions in Europe. Magnetic deliberately keeps its funds small, with its latest vehicle capped at €120 million, allowing for focused portfolios of early-stage investments in specific themes. While some may question the ability of a relatively unknown and small-scale firm to attract investors and provide the right backing for founders, Rosskamp is confident that Magnetic resonates with both investors and businesses seeking funding support.
Rosskamp emphasizes the importance of discipline in outperforming in the venture capital sector, which he believes often gets lost in Europe. Magnetic’s approach to venture capital is described as a “1970s-style,” with partners deeply engaged in discussions about the direction of their portfolios. The firm focuses on first principles to identify the necessary building blocks of an inevitable future in its target sectors. The themes currently in focus for Magnetic include resilience and security, climate, and modernization of core industries, with a focus on finding early-stage firms with broader applications beyond technology-driven solutions.
Portfolio companies of Magnetic include Project Eaden, Pluto Markets, and Trawa, which are innovative companies in various sectors. Magnetic’s support has been instrumental in the success of companies like Grover, with founder Michael Cassau noting the importance of having an investor partner who thinks in an entrepreneurial way. While Rosskamp points to the success of previous funds and investments in companies like Grover, Gorillas, and Komoot, he acknowledges the evolving competition in Europe’s venture capital sector.
Despite the competition, Magnetic aims to offer more than just talk about the cerebral and sophisticated nature of its approach. Rosskamp believes that there is still a white space for the firm in Europe and is committed to backing ambitious attempts to create lasting solutions to Europe’s biggest challenges. The firm’s track record of being an early mover in sectors that later attract broader attention, as well as its focus on creating startup champions, sets it apart in the venture capital landscape. However, Magnetic will need to prove that its approach goes beyond bold claims and can truly deliver on its promises of creating impactful change.
