GCV Powerlist 2016: Urs Cete, Bertelsmann

Urs Cete has risen through the ranks of Germany-based media conglomerate Bertelsmann and its corporate venturing unit after he joined his “first real employer” more than a decade ago. This followed dropping out of his PhD program in Leipzig in Saxony after four years.

Cete, head of Bertelsmann Digital Media Investments (BDMI), the US and Europe-focused corporate venturing unit of the Germany-based media company, manages more than $180m in seed and traditional early stage funds. BDMI has closed more than 120 portfolio transactions in both the main and seed funds in the past six years alone, as well as seven VC fund commitments, and exited 21 portfolio companies, including online video StyleHaul, according to its website and deal information shared with GCV Analytics.

Cete said its activity slowed in 2015 compared to 25 new and follow-on deals in 2014, despite “getting a new fund generation in 2015 out of which we are investing now”. He added: “The reason for this is we were quite focused on exits and overall have exited over 10 portfolio positions in the past 24 months.”

The most recent deals this year are still unannounced, with only two – Inverse’s A round and Unmute’s seed round – being public.

Of last year’s 12 deals, two were unannounced, but those made public included Marfeel, a Spain-based mobile advertising technology provider, and Visionary VR, a US-based virtual reality company.

Thomas Rabe, CEO of Bertelsmann, said: “BDMI plays a critical role in Bertelsmann’s innovation and growth efforts. Thanks to very close collaboration with our operating businesses ranging from TV broadcasting, magazine and book publishing to business services, BDMI is successfully connecting our businesses with innovative young startups.

“In the case of BDMI’s StyleHaul it led to the acquisition by our TV division RTL Group. Besides BDMI’s focus on North America and Europe, Bertelsmann has separate venture activities around the globe in China, Brazil and India. This gives us a unique global network of expertise.”

These other venture activities are Bertelsmann’s Asia-focused investment team, run by Annabelle Long, Bertelsmann India Investments and Bertelsmann Brazil Investments, as well as education-focused investments by the corporate parent. However, BDMI is the oldest and most active venture team, followed directly by Bertelsmann Asia Investments, which also is very active. Brazil and India have been established more recently with smaller venture teams and have naturally amassed smaller portfolios up to now.

Cete added: “2015 has been a very busy year for us where our portfolio of early-stage startups was able to raise $119m in funding. Given the expected slowdown in the economy and funding markets, this is particularly exciting. Many of those funding rounds had corporate investors besides us participate or lead those investments.

“This clearly highlights the importance of corporate venturing in the media space. After having exited a significant number of portfolio companies in 2014 and 2015, I am really looking forward to 2016 and beyond as new developments like virtual reality or changing user behaviour particularly of younger audiences will offer exciting investment opportunities.”

However, the transatlantic dealmaking requires Cete to be travelling between the US and Europe regularly – his comment above was provided just as he was boarding his next flight – following the closure of BDMI’s European office in 2014. The former team in Berlin, Jan Borgstädt and Tobias Schirmer, have in the meantime set up a VC firm, Join Capital.

Cete sits on nine startup boards, such as affiliate marketing company Skimlinks and digital content recommendation provider ZergNet.

But perhaps the final word about Cete and BDMI comes from its portfolio companies.

Alicia Navarro, CEO of Skimlinks, said: “BDMI exceeded all my expectations as an investor, since you get the best of both worlds with them. You get the benefit of BDMI as a strategic investor, where they deliver exceptional strategic value in the form of insights and introductions both within Bertelsmann and across other international media companies. And you get the benefit of BDMI as a traditional VC, looking out for the team and the company’s best interests.”