Low-key London VC wins big by betting on German startup scene

One of the largest IPOs in Europe this year helped make veteran venture capitalist Nenad Marovac of DN Capital one of the continent’s leading venture capitalists. The London-based investor, who doesn’t run advertising, reaped a 25-fold return on its investment in Berlin-based used car dealership Auto1, which went public on the Frankfurt Stock Exchange at a valuation of $ 12 billion in February.

Thanks to this investment and two other Berlin outings this year, Marovac joined the Midas List of Europe’s top venture capitalists for the first time in 2021. Its other deals included a German version of Airbnb, HomeToGo, which announced a $ 1.4 billion merger with SPAC of Lakestar firm of Midas List member Klaus Hommels, which began trading in September, and online eyewear retailer Mister Spex, which went public in Frankfurt in July.

The German startup scene has been kind to Marovac, who says that eight of the top 25 German companies by market cap of the past twenty years have been supported by his team. “We came to Berlin from 2005, and there were very few people watching this market,” he says. “We built a franchise for ourselves.”

Marovac is based in London and Berlin, but he’s not from either. The investor was born in Croatia and raised in San Diego, then worked on Wall Street before moving to the New United Berlin in 1991 to help sell the assets of the former Communist regime in East Germany. “My nickname was the Schlossverkaufer [castle seller]. Castles are very difficult to sell and I sold three of them, ”says Marovac.

This sequence of transactions brought Marovac back to the United States and to Harvard Business School, where he studied with future Facebook COO Sheryl Sandberg and DN Capital co-founder Steve Schlenker. After graduating, Marovac found himself in Europe working for private equity heavyweight Advent International. “I went through a chicken slaughterhouse and thought, ‘It was terrible. I don’t care how much money you make, ”says Marovac, who became a partner at the age of 32 thanks to a big bet on a Hungarian IT company. “A lot of people thought I was crazy to go.”

DN Capital was founded over lunch with Bill Comfort, chairman of Citicorp Venture Capital, who offered to take on Marovac. San Francisco-based Schlenker later joined. “I was recruited by a lot of venture capital funds in 1999 and 2000, but a lot of these guys didn’t have a background like today,” Marovac says. “Twenty years later, we have five funds and $ 1 billion under management. “

Marovac admits the fund’s first ten years were tough, but DN Capital avoided the fate of dozens of other same-generation venture capitalists who collapsed as yields fell and markets went through cycles. Welding. “I’m telling you why I think we were successful – we came from private equity,” says Markovac. “Having a very disciplined approach to analysis bodes well for us. “

One of DN Capital’s early successes was the Shazam song identification app; Marovac and Shlenker had to wait 14 years to claim a 20-fold ROI. The couple’s “hands-on” approach saw them lead a round of restructuring, hire a new management team, and give an introduction to Apple which helped the British startup “phoenix”. It was acquired by the Cupertino-based tech giant for $ 400 million in 2017. “If you want to make money easy, it’s not in venture capital,” says Marovac.

A trio of investments in Berlin’s former Marovac hunting grounds, which had emerged from economic hibernation by a new digital economy and the warp-speed culture of the Rocket Internet startup factory, transformed the fortunes of DN Capital. Marovac was an early investor in Mister Spex, HomeToGo and Auto1, all of which debuted on the Frankfurt Stock Exchange this year. “He was one of the first British investors to spend a lot of time in Berlin, and although he always pretends not to speak German, he understands it quite well,” says Dirk Graber, Founder and CEO of Mister Spex .

While DN Capital may be lacking in the flashy marketing of a new generation of American and European VCs, Marovac and Schlenker can boast of having deep networks that span across the continent and across the continent. ‘Atlantic. “Nenad has a very good intuition for choosing the right teams, the right people and the right business model, and what he offers on top of that is a very strong network outside of venture capital,” says Graber. .

Marovac’s partner Schlenker also landed an IPO this year, with Seattle-based money transfer platform Remitly going public with a market value of $ 6.9 billion. The duo began to venture outside Berlin to find new targets. Last year, the tutoring service co-led by Marovac GoStudent’s Series A; the Vienna-based startup is now valued at $ 1.7 billion. He also ran a Series A for Madrid digital recruiting agency Jobandtalent, which raised $ 610 million from investors such as SoftBank, Atomico and Kinnevik last year.

Jobandtalent co-founder Juan Urdiales says Marovac’s relationships open doors for growth investors and potential clients around the world. “I am a Spanish entrepreneur and the Madrid ecosystem is far from London or Berlin, but Nenad knows all the investors there and this has been essential for us,” says Urdiales. “When he does an intro, everyone takes him seriously because he’s been around for a long time and he knows what good looks like.”

Marovac may only spend a fraction of his time now in the DN Capital offices a short walk from Buckingham Palace, but his office is still adorned with photos of San Diego surf breaks from his youth. This global outlook and willingness to jump on a big wave when it breaks has served investors at Marovac and DN Capital well. “When you have your first losses, you panic,” he explains. “But when you’ve been in the business for twenty years, you realize that every fund has four to five companies that need to outdo the unicorns, and without them this business just doesn’t work. “