written by
Dr. Jens Pippig
Dr. Jens Pippig
Market Insights

Fuelling the fire: how ProSiebenSat.1 supports start-ups

Fuelling the fire: how ProSiebenSat.1 supports start-ups

You’ve got a successful product and a great team, but you lack the support in taking that critical next step? Here at ProSiebenSat.1 we are proud to help build start-ups through the power of TV and online advertising. Here’s a guide to the funding and support possibilities we offer.

Why is TV relevant to start-ups?

If you are thinking about a first marketing strategy for your start-up, TV advertising might not feature high on your list. Too expensive, right? And yet, classic linear TV is still the most consumed medium on the market and therefore ideally placed to support growing B2C companies.

Why does ProSiebenSat.1 invest in start-ups?

German regulations stipulate that only a fixed number of advertising minutes are allowed per hour per TV channel – actually twelve minutes. And of course, many of these minutes are bought by premium companies such as car manufacturers and FMCG players. For the remaining advertising minutes we choose to invest these remaining minutes into growing companies that wouldn’t normally have the resources to advertise on TV. In doing so we ensure we are building the brands (our customers) of the future, supporting products we believe in, and, because we share in these companies’ risk, these remaining TV advertising minutes prove far more lucrative than they would have been otherwise. A win-win for all.

Start small, think big

So what support do we offer? Firstly, the ProSiebenSat.1 Accelerator aims to get early stage start-ups on board to test if TV works for their product or service. The Accelerator offers a package of EUR 1.5m advertising volume to companies providing mass-market relevant products or services and a tailor-made mentoring and coaching program. Start-ups applying should have generated revenue between EUR 0.25m and 2.5m p.a., gained traction and have a clear understanding of their customer acquisition strategy to fully benefit from the media volume offered. In return, the Accelerator receives a small stake in these young companies via a fair convertible note setup.

Isn’t this SevenVentures?

SevenVentures, for the uninitiated, is the ProSiebenSat.1 Group’s corporate venture capital arm which invests in start-ups in the post-Accelerator phase, companies usually with a minimum turnover of €5 million. In return for individual capital (Media for Equity) or revenue shares (Media for Revenue), companies receive a package of advertising time and expertise. The essence of this model is the rapid increase in brand awareness and the increase in sales. The offer also includes the development of a marketing plan, media planning, booking and evaluation as well as online optimization and optionally also the conception and production of commercials. A further distinction between start-ups supported by the two subsidiaries: SevenVentures deals often include a minimum guarantee and a revenue-based cash commission, which is usually unmanageable for start-ups without extensive funding during the early growth phase.

ProSiebenSat.1 Accelerator and SevenVentures work closely together. If a ProSiebenSat.1 Accelerator start-up performs well and demonstrates that media is the best way to scale their business then a follow-on deal with SevenVentures is a likely next step. Examples are Jaimie Jacobs and Clark.

The SevenVentures Pitch Day is now in its ninth year and has helped numerous companies, including Selfapy, Hafervoll, Tinkerbots and GetYourGuide, with their breakthrough. The winner will receive a media package from the ProSiebenSat.1 Group which not only features a €3 million TV advertising budget but also includes €30,000 for the creation of a TV spot. The aim is to give a growth boost to fast-growing B2C start-ups with unique products or services and a scalable business model. Apply from July 2019 at sevenventures.de/de/7vpd.

And finally

Once start-ups reach a certain size (revenue and profit-wise) they become classical media clients with standard conditions. At this point they are then handed over to SevenOne Media (SOM), the subsidiary which markets all advertising across ProSieben channels and products.  A great example of this is Zalando who started with SevenVentures in 2009 and went to SevenOne Media in 2015/16 and also Lieferando who joined SevenVentures in 2014 und was taken over by SOM in 2018.