Qualifyze Makes Supply Chains in Life Science And Chemical Industry More Transparent

ABOUT THIS EPISODE

"We buy the on-site data from a good auditor and re-sell the data to other customers of this supplier."David Schneider, CEO and Co-Founder Qualifyze

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This show was made possible by Hessen Trade and Invest with their brand Invest-in-Hessen. You can learn more about them here (https://www.invest-in-hessen.com/). We also run a dedicated sub-podcast with all interviews and news in cooperation with them. Find it all here: https://techstartups.sounder.fm/

"I approached the company for an investment, and they sent me the chief of staff to vet the company. Over a few beers he decided to join me as co-founder, but the company never invested."David Schneider, CEO and Co-Founder Qualifyze

The Founder

This time our guest is David Schneider (https://www.linkedin.com/in/%F0%9F%87%BA%F0%9F%87%A6dr-david-schneider-1100a066/), Founder and CEO of Frankfurt-based Qualifyze (https://www.qualifyze.com/), a startup that helps in the chemical and pharma industry with audits. David did see a lot of places while studying in the Netherlands (Maastricht, Rotterdam), National University of Singapore and Università Bocconi in Italy. He was also and intern with JP Morgan in investment banking in London, Rothschild in Frankfurt, or BASF in Ludwigshafen. Before starting his own company, he was working as a consultant for more than 3 years. He tried to attract investment from a steel trading company, and he convinced the person the company sent to become his co-founder.

The Startup

Qualifyze (https://www.qualifyze.com/) started out as a marketplace for commodity chemical products, called ChemSquare in 2017. They soon realized that in the chemical and pharma industry the required suppliers’ audits are a big hassle and they pivoted to help their clients with digitizing them. These audits are essential for supply chains in the chemical and pharma industry, where faulty ingredients can lead to deaths or damage to equipment or nature.

"We decided to get the supplier qualification on our platform to make the chemical platform work and it turned into a new business model." David Schneider, CEO and Co-Founder Qualifyze

Venture Capital Funding

They raised a Series A funding round, led by HV Capital of 14 mn US$, which was disclosed in November 2021.

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MMM wine. Now that I have your attention, I want to welcome you to our podcast and introduce you to this episode of sponsor. Then a vest. You may know that I grew up on a Vinde yard, so I was very happy when when a West approached us with the corporation. They enable you to invest in fine why? You can do this to diversify your portfolio or simply to get to know great wines, since you can get your wine also delivered home to enjoy it, or you can do both. who learn more, use to link in the description below. Welcome to start up bread that I own. Your podcast and Youtube blog covering the German startup scene with News, interviews and live events alone. Welcome everybody. This is Joe from start Operad that I owe your start up podcasting. You to block from Germany, bringing you again another interview in our series with invest in Hessan. If you want to learn more about them, check out the link in our chow notes or go dub dubbed up invest minus in minus Hessantcom, where you can learn more. Today, I would like to welcome that that here in our interview. Hey, hi did hi Joe. How's it going? anding to thank you how are you doing? I'm doing great. Just got tested negative last week, so after being in quarantine for nearly one and a half weeks. So I'm glad to be back, but still at home. I would assume that felt a little bit strange, but nonetheless we're very happy to have you here. You are here because you're the founder and managing partner. It qualifies, but we will soon get into that. I was again looking a little bit at your profile and I saw that you did quite a lot of interesting stuff. You did, for example, a Bachelors Degree at University of masterish in Netherlands. You attended the University of Singapo, or UNIVERSITAP BOCONI, Technical University Dam Stat and finally a hot a damp school of management, again in the Netherlands. So you have quite seen a bit. which places did you like most? So, I guess for every student, I guess the exchange semesters are always the most exciting ones, and I did to exchange semesters which were indeed, as you mentioned, in Singapore and in Milan at Pocuna University, and I would say the one in Singapore probably was one of the most fun six months I've ever had in my life in terms of traveling, meeting you people, meeting different cultures. So I would say there was probably the most fun one. I also love Singapore, not only for the Formula One is, which I attended once in person, but also for the mix...

...of Indian, Chinese and Southeast Asian culture, the Hawker centers where you can get almost like every matchable food. It's really awesome. Plus, it really never gets cold in the city. I asked a friend who grew up there does it really get cold, and he was getting close and said during monsoon, you know, at night you can get below twenty degrees Celsius. Yeah, I think. I think whether it's good. Plus, it's a great hub in terms of traveling because you can basically go to everywhere in Southeast Asia within a couple of hours flight. So at that on top. Yeah, for the metric hating Americans, that sixty eight degrees Fahrenheit, so it is barely gets below that. It's a really nice place and pretty close to the equator. And you seem quite a bit in terms of companies, established companies. I do believe you've been with rust child as an intern. You have been at Bas F. I think most people would not know them. It's one of the largest chemical companies in the world and they're headquartered, I would say, something like forty five minutes to an hour to the south west of Frankfurt. What did you learn there and how did it leave an impression on your life? Yes, so, first up front, so I always want to become a banker, so at least that was the plan, especially while I was studying. So I focused a lot also on that while I was studying that, extra costs, etc. Then I actually got first peaks into investment banking, so at GP Morgan in London and also at a Rothchild and Frankfort, and even though I really appreciated the size of the deals that you work on, the spirit, etc. I believe the working hours were actually indeed crazy and that actually led me then to the side. Okay, maybe banking is not the right thing for me. So I decided, how the hell do I get out of it, because I've always spent most of my internships in like the PWC, smaller banks, bigger banks. So it was a bit hard to actually find an alternative afterwards because a little bit had the finance stamp on myself. So I thought one way how to get out of it is actually to do a master's degree, which is a bit broader, not folks on finance, and also to do an internship at a company that is not related with finance, and that was actually BSF, and I worked on a corporate finance project at BSF. will basically looked at acquiring a small company. I basically did the analysis on the deal, rationale, evaluation etc. So for me, my internships have really been a bit of path of finding out what do I like, what don't I like, and eventually then I ended up in consulting at McKinsey. So, but that's a bit on the story behind yeah, don't worry, we get to this step. So for a little bit over three years you've been a consultant there, because how is wondering. You've always been in banking, like transaction oriented consulting and stuff. Only this. Then you've been with BASF. Then you have been a consultant and then you started what is today qualifies, I do believe it was...

...at this time called Champ Square. And how did this happen? Where did you find your interest for supply chains for chemical industry? How did this happen? Yeah, it's good question. So I need the company was called Chem Square before and basically during my time at McKinsey, who are worked a lot on private equity portfolio company. So many restructurings at mckinzie. Always have the chance to do a PhD or MBA in Germany and I opted for the PhD option. So I did my PhD at to take a clear University of Damschat and what I looked at during my phd was user behavior on digital platforms. How can you increase certain transaction rates, conversion rates, etc. And while I figured it, I was plenty of stuff already in B to s BTB was very much uncovered yet from a research perspective. So I decided might make sense look into be to be startups. And to be honest, I didn't find that many. That was in two thousand and sixteen roughly, at least not that many in Europe or in Germany. And one very big example that I found was Kruckner. It's a steel trading company in Germany with several billion revenues and they were basically all over the press because they were digitalizing steel trading basically, and the reason why I started doing this amongst others, because was still it was a commodity and prices were dropping because there wasn't oversupply in China. And actually remembered from my internship at BSF that in chemicals you also have commodity chemicals and Specialty Chemicals. So I thought, if this guy is doing it, is still trading, why can't I do this with chemicals trading? And that basically how the idea was born to found Kem Square, to build a digital platform to buy and sell chemicals online. And so in two thousand and seventeen, basically I left mackinsy while I was still doing my PhD. The PhDs finally now completed, but I think only last year. So actually I dragged a bit when I basically left McKinsey, but that's the history behind Cam Square. Then in two thousand and eighteen, basically we figured that what we plan didn't work and then we basically pivoted our business model and since two thousand and nineteen working on what we call today qualifies. So that's the story behind it. Yes, I've seen you basically started the company what is today qualifies around that time and I was actually surprised why you opted for a chemical industry. Can you give us some information on that? Plus, I would be very interested how you figured out Cam Square would not work and how he decided to actually pivot and in what direction. That would be some important decision I would like to learn more about. Yeah, so, as I said, I was inspired by Cluckner Steel Trading Company and it worked in steel, or at least there was this perception at that time. was because steel was a commodity. It's quite a big market. It's a commodity, which means price matters a lot and when price comes into play it's a lot about comparison, very fragmented market, etc. So that was basically one element that I...

...found very appealing in the steel industry. And you could also find this very similar structure also in the chemical industry, where you have many chemically distribution companies, many commodities, highly fragmented but still very big market. And basically, yeah, I think the notion is very clear that to be to see and B to be buying, behaviors tend to converge. So that was also our hypothesis at that time. So I decided that time to build company where you can buy and sell commodity chemicals onlines will be to be platform and I thought it was going to be sufficient to start with a simple price comparison engine and basically who delivers what and too, for what price. I think the idea was still good and probably it still is, but what we then learned along the way, and I have to say I don't have a chemical background, and either did my cofounder, or does my cofounder have Floren, who basically joined a couple of months after I founded Chem Square. It was actually the executive assistant basically off the CEO of Kleckner. So it's actually funny, sorry, because when I launched Chem Square I reached out to the CEO of clegn and said, look what you're doing in steel, I'm going to do in chemicals. Don't you want to invest? And then basically he sent his chief of staff to test myself and the investment hypothesis and then we met up in a hotel in Frankfort, we had a couple of beers and then decided that we were going to be doing the simply together. And that's how, Florid how I met my cofounder. So I would be curious how to CEO reacted and if they invested. Yeah, so I can enter the second question. He didn't invest. I think you can imagine the first part. That is quite a good story. Somebody got sent to that your company for an investment and you actually higher you get this person as cofounding and that makes quite sense. There was a good one. And you guys then get into collecting investments. Did you get some investments before you pivoted or after? Yeah, so actually we did get a couple of investments before we pivoted. So, as I said, like a launched camp score in two thousand and seventeen. Early two thousand and eighteen florin joined and during two thousand and eighteen it was basically a journey of fundraising and also trying to figure out how to get our business model running, and which we didn't eventually. So we succeeded in the fundraising part. We didn't succeed in the business boddle part. I think the reason why we still manage to get in capital because people especially believed, also and us as a team, so on Floren and myself, and they figured that if this doesn't work, they will find figure out a way how to make it work. And you also asked why it didn't work. So basically a couple of reasons maybe to that. So one element was that we thought price comparison was going to cut it, but actually the chemical distribution is much more complex and prices just one element. So basically, they typically they you need to offer certain services, like insurance, like logistics. So like just the price advantage is not enough of an them of a value add in order to really change suppliers, and a very frequent basis because you also have long term contracts, etc. Then another element was that you really need to integrate into...

...the B tob procurement systems, because if you do not do this, then whoever is buying it can selling the chemicals online, needs to enter all the data on your platform and then also in their own systems, which causes duplication and it's also additional work. Plus, at that time, many large chemical manufacturers were planning to launch their own chemical ECOMMERCE shops, basically to sell directly to their customers and basically circumvent the distribution companies. There was also certain reluctance to join these kind of platforms because everybody was looking like them in terms of like this is going to change everything, like and so I think these were the reasons why it didn't work. We then did a quite extensive workshop with many of our customers who actually also bought some of the chemical raw materials, but mainly in the life science industries, so food farmer, and then we ask them like, in hindsight, from a product point of your very stupid question, but why aren't you not using the platform? And then like why are not using our solution? Why is it's a hard to get started, and basically then discussed started among our clients in the workshop. In the discussion was not about procument but was actually about supplier qualification, but not being able to just change from one supplied to another, because there's a desk tons of documents that you need to take care of in order to switch from one supplier to another, and especially in the pharmaceutical industry, and the regulation it says that you cannot just use a supplier just like that, but you have to register to supplier at the authorities when you list when you want to sell a certain drug in a certain market, and as part of this document package that you need to send to the authorities, you also need to show that you have audited the supplier with means that you've physically inspected the supplier to make sure that whatever he's selling to you, that he has been manufacturing it under certain rules and regulations which are described by the US FDA or by the European Ema. And so we thought if we fix this problem, if we fix a supplier problem, supply qualification topic, then we would get the market place running. So we started in two thousand and nineteen with the supply qualification platform, focusing on supplier audits in the pharmacutical industry. Then we actually figured that this was a business completely on its own, and we've been doing this ever since. I see how would be a little bit curious about the conversation you had with the cofounder, Flowyan. Flowyan, this is not going to work, but I do believe our clients just gave us new business model. Was it something like that? No, actually so. I would say that the right was equally tough for both of us. So we were both setting on the phone, really calling hundreds of customers in the industry and trying to sell them our product or basically offering them that we could organize any chemicals at a very cheap price, and that's what we tried and we already there. We noticed that the feedback wasn't too great. So it wasn't the big of a surprise. It was more like a steady process. But we both came to the conclusion this is not working. We don't know what is what's going to be working. So we were very open with our investors and we said look, we have like one more shot and we did one last funding round with investors. Also said would trust in you, but if we want to go the way there, this road with you like which is more uncertain than before, then you also need to restructure the team, you need to reduce your burn rate, etc. So that was actually very, very tough in two thousand...

...and eighteen, because we hired good people flooring in myself, and within the first couple of months we basically had to let them go again because we realized that what we were building wasn't really working. At that we actually had to take a step back, reassess our product market fit and then build a team around that, and not like build a team and then see what they were going to be building, because we couldn't afford that. So that was actually very tough. Was We hired people and had to let them go shortly thereafter. That was very first personally, I would say very memorable cup of memorial weeks because it was super tough for us. But funny enough, one person who we actually decided to let go at that point in time because we couldn't hold them, the person actually rejoined qualifies a couple of months back. So I would say that's hopefully no more hard feelings. Those are very tough times two thousand and eighteen, but now those tough times are hopefully behind you forever. We will see. And how. Would be curious can you explain a little bit the problem in quality control informer and chemical industry? I don't have a chemical background, but the worst case is people can get sick, they can die, all factories even can go boom, exactly so eventually. So what we focus on, as I said, it's the pharmastutical industry, and so how it works today's if you're a drug manufacturer, like a Stata Novartist, if you're setting your drugs in the pharmacy, if you want to sell them, you need to proval from regulatory authorities that you can sell it, particular drug in the market. And of course the reason why this regulation is because if a drug doesn't work, the worst thing that can happen is that you die. So there's obviously very strict regulation that describes how dregs need to be manufactured, but not just how the drug itself needs to be manufactured, but also how the ingredients that are used to manufacture the strug, how these ingredients need to be manufactured. And now politics are talking a lot about the European supply chain. Act Or companies are basically will be forced potentially to make sure their suppliers stick to certain rules, and it will not be simply sufficient to believe what the supplies telling you, but you actually have to verify it somehow, and the pharmaceutical industry recognizes already twenty years that like pure certifications, etc. Or relying on what somebody's telling you is not enough. But impose a regulation. It forced the strug manufacturers to order their suppliers on a regular basis. So it's up to their responsibility to see if the products that they buy from their suppliers correspond to certain quality requirements. And, as you can imagine, many of the suppliers are based, for example, in Asia. The supply chains are quite international, quite big, very complex, which means that if pharmaceutical companies they want to assess the whole supply chain, ordered their whole supply chain, it's quite a cumbersome process. It's a very critical one, but it's also very expensive one, because companies need to send their own people physically to the supplier side to then walk around the suppliers factories and production sites right and auder report. Then they fly back and this often takes up to five days of total work writing the report, flying back, flying forth, being on site for a couple of days preparing the audit. So we figured it this was quite a big problem for the industry. Not The problem, but like very cumbersome and expensive process. And what we learned along the...

...way is that many pharmaceutical companies they use the same supplier and they also apply the same kind of audit framework when they audit the surprisors, which means they all check for very similar information. But the data was not really shared before. So what we thought at that time was a very good idea is that we collect the data once through a good auditor and then we own the data of that supplan done, we can just sell that kind of data to the different pharmaceutical company set buy from that supplier. We can help the companies get this regulatory data in the fast and efficient and cheap way, where at the same time helping the suppliers reduce a number of on site audit spy from their customers, which is a big pain to them right because it's takes very time consuming to host all these customer audits, and that's basically how qualifies then was born. So basically we collect data through audits and then we re sell that data to the pharmaceutical companies of the suppliers. When it was reading this at first, I also had the impression you sent your own people there and that can be very expensive because if they have to fly business class to Asia, fly back and never forget the jet leg it's if you have you do that on a regular basis. I do believe the fund stops pretty soon. Plus, I was wondering can you also do like send an external orditing company there, or is it's so specific that your people have to do it? Is there something that you are required to do it in person? Yeah, so basically today the regulation says that you should unless, for example, like covid comes in, but typically you always try to be on site, which means this is something that you cannot digitize, for example. Right the person will always need to be on site. But of course you can ask the question who needs to be on site and where's the person coming from? And we very early on said that if we want to get this very big, we're not going to be able to scale by hiring every single auditor that is in the world in all the different countries, because the suppliers that we ordered the scattered around across a Asia, China, India, the US of course everywhere around Europe. So it wouldn't make sense to hire everybody. So we will rely to, very early on, independent auditors where we have a very extensive qualification process, but once they qualify for us, they can basically do the audits and their respective countries. So we have auditors who are based in China who ordered Chinese suppliers, and the same goals for the US and for the different European countries, which means that we can be on site the auditors. They know the culture, so they know the environment, they might even know the supplier, they know the language, they don't need to travel that far, so the cost advantage was also cultural advantage that we basically have. That, of course, helped us a lot during corona, when many companies couldn't travel where they couldn't send their own staff around the world, and we were already present. So basically we could just do the audits on site for them, and that was a huge help for the pharmaceutical industry. I totally believe that. So basically you are getting from a marketplace where you can deal in chemical ingredients, I'm would say, to a place where you can deal in...

...audits of chemical companies, is chemical supplies. Would that be about right? Yes, exactly. So often these materials which are procured by farmer companies, they're eventually their chemicals. So that's true. So exactly right. So we don't just deal with the the audit, but rather with the data that we collect at the suppliers. So it's highly confidential data, and I think so the good part is, or we put it differently, so today there's tons of data around in the world. You can find data publicly. A companies will, you can send them question as they will explain to you how they're doing things. They're willing to share data on their own. The problem is, how can companies decide which data they can eventually really trust? Of any kind of Datata is out there in the market, both that is supplied by supplies or that you can find publicly, and what we basically do is we actually go on site and collect the data independently so that customers can be sure or sure that the data that we provide has really been verified by US independently with our own eyes on site. Right. So there's no it's very hard to fake that kind of data, and so basically, I would say we've shifted from a procument platform to a data player, basically. But to keep in mind, of course, the suppliers. They need to accept that we share the data with their customers. So we cannot just like randomly sell the data, but would they need to prove it. But it's always in their interest as long as they know the customer, because of course, for them, if they prove US share the data automatically means fewer customer visits on site, which is also in their interest, at least to a certain extent, and maybe even more potential customers. I would be since I don't have a bigger understanding of what you basically doing there. I was thinking of like thinking forward your business model, when you said you're there in person, you order them. The data is hard to fake. How is wondering. Is it the next step for you basically to put sensors in their manufacturing and read this data like in real time? Is there something you're thinking about? Talked about dealing in data, or is it not necessary? Yeah, so this could maybe potentially very far down the future, this could be something, but we know that other companies already doing it. So what we rather believe is, and it actually came a bit from where we originally came from. So we built a tool or digital audit software that will help us perform audits at scale, because we're doing so many audits, like not many other pharmasutical companies in the world are or will be doing, because we just auted on behalf of so many other farmsutical companies. So we really developed a software that allows you to prepare and audit super well, to execute it really well, to an Lasci data that comes from it, and this is something that we're using internally now, and we believed that with what we're building, we actually have the potential to become like an end to end all in one audit, a management solution that we can offer potential to pharmaceutical companies so that they do the audits with our tool themselves, that we basically it just give them our experience through a product in their own hands, where they can do their own audits or just out source the audits to us. It will not matter, but there...

...will be one data lake where all of the data basically comes together and thereby really great transparency and share able data that is even easier to verify or, put differently, harder to fake. So I think that's the direction which we're going. So we will hopefully in the future enabled many companies, also outside of the pharmaceutical industry, to do audits at scale because also with a supply chain law, verifying information from your suppliers on site will become more and more critical in the future. The problem is, if every company does audits on their own, it's not really a scalable solution because it's super expensive to do. You cannot just like sems. They cannot just in Germany ordered all the several hundred suppliers scattered across the world. That would be way too expensive for them. They don't have the resources. But if we give them, for example, a tool at hand which helps him to do this, software at hand and we're able to share that kind of Datas at that not everybody needs to pay for it on the single you, but the costs are being split, then you can actually make audits viable solution for every company in the world, and that's basically what we intend to do. I see we are here to also talk about your funding around talking about growth here, you raised footeen million year as dollar, which is quite sizeable for the area here, but I would also say sizeable for like almost every place in Germany. How did you approach that, because I've seen your investors and they are not necessarily known as a specialist in the chemical or Farma Industry. How did you approach them and how did you explain this to them? And, of course, later down the road, what are you going to do with the money except, like, for Ping Pong table for the office? Yeah, funny enough, we don't even have a ping pong table. See, now you have an idea how to spend the money exactly. So I think there's always enough ideas, not a but jokes aside, so I would say actually, I was a bit surprised and big you don't have that many v see funds, I would say, in Europe, who are very much sector agnostic. I think you have it for many be to see sectors like, I mean ECOMMERCE, obviously, is a bit a big one. Direct to consumer, you have many vcs for experience in this, but you don't have that many venture capital companies who really focused on Farma, for example. If if you biotech companies, but I think, I think very similar for deep take us. I think there's also a lot, so much. So basically, what we try to do very early on this to get investors on board can help us on different ends. So one is obviously venture capital. It's just a large amount of money that you can get with help, with access to other of their portfolio companies, to lots of expertise, a good network, especially when it comes to the next funding round. So that's what we look for when we when we looking for institutional preventure capital investor. At the same time, however, we also took on seasoned business angels who came from the industry, so either from chemicals or from the pharmaceutical industry. And so yeah, basically, and that's what we looked for when we composed our investor list, that we said we wanted a bit of both, so that we make sure with teas...

...and how to build a company, how to scale a company, but also somebody who can help us do faster learnings when it comes to the pharmacutical industry, because, of course flor and myself, with a super create the farmer expert team in the company, but we both are not pharmacists or quality people ourselves. Floren is a mechanical engineer and I'm a business person. So, as you can imagine, getting this kind of expertise for us was actually very helpful and also hinds at the very smart choice. I see see amongst your founders there's some wellknown names like Comparion, kvew so, the government hinel founders, Apx, also known as axle spring, and Porsche Cherry ventures, H V capital. I noticed there's no international investor. Why? And since you have a location in Barcelona, would it make sense like in the next round? Yeah, so it was actually very funny. was quite a competitive process, especially the last funding round, and when we picked an investor, we really valued the collaboration as with the people because we believe that the big road still lies ahead of us, and what we were looking for is for somebody where we know we're going to be a significant part of their portfolio, which means they're willing to invest also time in us. Right. We don't just going to be like a tiny ticket of a huge fund. That was important to us. We really valued the people who we work with like do they have to they share the same spirit, the same energy level like we do. Do they have the good reputation when it comes to follow on funding rounds rights, especially when it comes to serious be so were we believe that's hopefully when we're going to be on boarding also an international investor that can actually help us with the challenges that we might be facing when we're there. So today a big part of our business is still playing in Europe, so the customers that we have mainly are from Europe. There's not so much support we need in terms of hopping over the pond, for example, to the US, but this might, of course, change with the next funding round. So it's really like think you always pick your investor based on how they can you support you on a certain part of your journey and then when their journey is over, the requirements basically change. So, for example, when you mentioned Apx, that was an accelerator. That was very early on. Then after the accelerator, basically we joined. Cherry joined as an investor, which is a preseat stage investor with a very good network. So they supported us in the early stages and then basically later. Now HV capital joint too, is typically invest in serious a soul who have seen bigger companies how they scale from, for example, the twenty two hundred people at set right. And for the next investor we're looking for somebody, obviously, who has more experience in scaling beyond that. Hope that it's a bit clear. That makes it clear. Since we are recording this sponsored by invest in. Hassan, can you also talk in the last part a little bit about how he wise for you to be head quoted here in Frank Food? Would are some of the advantages disadvantages? And a final question if you would have one request to political decision makers in the state, what would you wish for? Let me start that...

...with the first question. So it's Frankfort an advantage. So maybe as an anecdote, when we get Cherry ventures as investors on board. They told us as a joke, you'll get the investment if you move to Berlin because you will struggle in Frankfort. And of course I'm from Frankfurt, the flora is from Cologne. Also family here in Frankfort, so for me it would have been very hard to move anyways. And but we thought really that time, we were convinced that it's going to work. Like Frankfort has top talents. It's good. You have a good ecosystem here, your farmer companies, you've good universities, you have consulting companies, etc. So there's talent here, infrastructure, etc. And however, what you don't have here is capital and, I believe also a little bit the startup spirit. At least I don't really feel it in Frankfort. It's more still very many very traditional service oriented industries like consulting, banking, lawyers. That's at least been my feeling so far, mainly from Frankfort, and luckily enough we had one of our employees, we hired them, of a company in Barcelona. That was a bit of a coincidence. However, then we realized Barcelona actually is a super great hub where to build a company because you have lots of talents. You have. It's very international city. It's a very attractive city, so many people want to go. I mean there's even the beach, it's worn most time of the year and there's a very good ecosystem. They've also very international talents. So and now actually our Barcelona office is much bigger than our Frankfort office. So I would say you can be successful in Frankfort, but I think if you grow bigger and if you really want to hire also, like a lot of people, it can actually get a challenge. I would say for individual profiles you can manage it, even though it's expensive, but if you try to scale, I believe, at least has been my experience, you will hit bottle next one it comes to talents rather early. So that that was it for the first question. And on the second question, if you would ask what I expect from policy makers, I think especially on the supply chain act, what I mentioned earlier today, if you look at how companies are handling you see that many of them are actually struggling. Also the European green deal, because many elements are still very vague, which means companies know something, because can hit them, but they don't know how it's going to hit them because many things are still quite unconcrete. That's very hard for especially for SEM is, to understand, like what the implication will be. So there's lots of uncertainty and I think what policy makers should do is to bring more clarity, even like make some rules early on, even if many things are, I'n clear, but give them some kind of clarity of what will happen. Tried and if the rules were not good, changed the ruled afterwards. But I think this is better than keeping everything open, because I think that's causing lots of frustration, especially on the company side. So that's one element that I would wish for. I see. So my understanding is right now that you see a little bit difficult to be in Frankfort because you cannot hire, like really scale up startups here because there's a lack of talent. Would that be something to be addressed? So yeah, definitely. So I think like finding the talent is one element, but it's also so, I think, providing the infrastructure there, but also getting people to move to Frankfort.

That's also not so easy. So we have actually had quite a few people who move from our Frankfort Office to the Barcelona office, which, of course, I cannot understand at all. So I think it's a bigger issue, right, because there's so many factors that come into play. I mean, if you look at it from a startup point of view, what is attractive, right? So you need capital. I think that's one element. I think this is something that you, for example, do not have so much in Frankfort, and not compared to Berlin and in Munich, for example, and maybe even this lot of Cologne. Then I would say the mindset of the people, which often also starts in the university. I mean you have we have oh which is like not too far away, but they're actually still people, meant still, they end up going to Frankfort. So I think it's the whole spirit. Like if you come to Frankfort, typically have more some of the more normal jobs, I would say, not so many of these crazy jobs, and it's maybe also because it's an expensive city, I would say, but other cities also quite expensive. So I believe it's a big challenge to correct. There as many things which are going on also, like take what tier for example, and which is a hub where they basically bring people together where they also work together on topics. But still believe we need to do more. I think they need to be more incentives for founders to come. When it comes to offices on the universities, they need to teach these kind of things, like how to take risks or calculated risks. The mindset, I think, needs to change. But on the other hand, I think on bigger level, I mean also now with this has been a sustainability commission which has been moved to Frankfort, which I think is super global topic. A sustainable it globally nothing that Frankfort scored to get like this big institution to Frankfort, I think is a great success and that might also late lay the foundation, for example, four potential susustability startups, because then the might be sort of an ecosystem present. So I think this will be interesting to see. But I mean, even though you have all the banks in Frankfort, there's not too many finntaxt that came from Frankfort right. So the question is like how is that really adding value or is it actually other factors? There is a lot to think about for the politicians. Thank you very much for being a guest. I would like to thank you for being a guest, for being so open and informative, and fingers cross for you serious be funding, which I assume will come sometime this year, next year, let's say, most likely in the next two twenty four month hmm. That's the kind of feeling I had as well. Thank you very much, David. Thank you so much. Have a good day. Bye. Bye, Youtube. Bye. If you are a professional looking at the European startup scene, Germany is a place you cannot miss. Fortunately for you, there's start up Rad dot EO, the authority on German startups. This English only podcast brings you fresh interviews each week. Most likely, you had never heard or read anything on these startups before in English, but you will, in the future, be ahead of the curve and subscribe to start up Rad dot EO podcast or check for the start up Rad dot EO Internet radio station. Check your Alexa for the start up Rad dot EO skill as well.

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