Across central Europe, Tengelmann Group is known for operating grocery chains, DIY stores, and textile discounters. But the 146-year-old, family-owned holding company will now attempt some impact investing.
Tengelmann announced that it will be establishing Tengelmann Social Ventures (TSV, in German), a sister company to its venture capital firm Tengelmann Ventures (TV), which focuses on young internet companies. TSV will finance social businesses, meaning those with profit-oriented models that pursue social goals, and provide advisory support to social entrepreneurs.
“The focus of this involvement is on young companies that generate a ‘social impact’, i.e. a positive impact on society. Our central theme will be: ‘Social Impact First – Financial Impact Second’,” said Karl-Erivan W. Haub, the managing partner of Tengelmann Group.
In 2009, Tengelmann became serious about backing innovative e-commerce companies and started TV. Since then it has injected several hundred million dollars into over 30 companies. Their first investment into a social enterprise was in 2011 with Coffee Circle (in German), a company that sells fair trade Ethiopian premium coffee and redirects part of their sales to local development projects.
Haub said that their experience with Coffee Circle was a positive one, which warranted more activity in this area and the founding of TSV.
TSV’s first brand new investment and Tengelmann’s second in a social enterprise is Kiddify, a online tool to encourage young children ages 6 to 14 to share their knowledge, creativity, and talent with their peers. Children can teach each other dance moves, baking skills, arts and crafts, languages, as well as sports tricks through videos uploaded and approved to the web platform.
“In the future, children will also be to able communicate internationally via our platform, thereby enhancing their understanding for language and culture,” said Paula Jackson, founder of Kiddify.
“The e-learning market is a growing and very interesting market. The founder has developed an innovative business model whereby children can learn from other children – internationally and independently of social background. The team and the idea have impressed us so much that we decided to get involved at a very early phase of the startup,” said Christian Winter, CEO of TV.
Photo: Tengelmann Group
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