Five Questions for Cherry Ventures

Graduates of WHU – Otto Beisheim School of Management have an impressive track record when it comes to the founding of start-ups. Among these alumni are Filip Dames (Diplom 2008) and Christian Meermann (Diplom 2007), two of the co-founders of DAX-listed fashion retailer Zalando. In addition to erecting the Zalando Lounge, Dames headed the company’s product department and was a driving force behind its international expansion. Meermann led the marketing department as Zalando’s CMO, ultimately bringing the company to fifteen different countries across Europe. In 2016, the duo, both with first-hand experience with the challenges that start-ups face, founded Cherry Ventures, one of Europe’s most prominent venture capital funds. In an interview with WHU, the two alumni evaluate the European market and speak about which start-ups they feel have the most potential for success.

We often use this column as a chance to chat with WHU’s entrepreneurs, but with Cherry Ventures, you both are, in a matter of speaking, on the other side of the equation. Your goal is to help exciting new start-ups and to turn them into success stories. What pushed you both to explore this path and found your own venture capital firm?

Filip Dames: The idea behind Cherry Ventures has always been to give today’s entrepreneurs access to the kinds of funding we wished we had back then. When I started my first company back in 2008, I fell flat on my face. But when that door closed, a window opened to something new. And that was Zalando.

Quick pause, I think we have to explore that a little more. What happened?

Right after graduating from WHU, I founded an online marketplace called Tamundo. And we tried to offer an auction platform specifically for collector’s items, art, and antiquities. We received financial support from our first funding round and lined up an exciting roster of auctions. We even put Michael Schumacher’s first racecar up for auction. But we realized pretty quickly that the idea wasn’t “scalable,” as we say nowadays. (Laughs.)

And really, it was the right time for a fresh start. So, I decided to join the team at Zalando, which truly was in its infancy at the time, where I helped, among other things, found the Zalando Lounge. 

And then in 2010, Christian joined the team as our CMO after his time at BCG. Over the years, other entrepreneurs kept asking us for advice and support, and that’s when it became clear that we could take on this important role more officially. At the time, the German VC scene had few big players, few bold investors, and nearly zero entrepreneurs who were investors themselves. At Cherry Ventures, 100% of our investors are former [business] “operators” that understand the daily goings-on at start-ups. And that gives us a deep understanding of the perspectives of today’s entrepreneurs. We know the major challenges—and the major opportunities—that come with starting your own business. We support our entrepreneurs in a practical way, offer them advice specific to their needs, and have the goal of cultivating a long-term relationship with them. We’re not “just” investing capital.

How can start-ups and founder teams convince you to invest in them?

Christian Meermann: The competition is stiff. For seed funding, which we specialize in, we see about 5,000 start-ups apply each year.  Of those, only about 100 make it to the next round, and then only a select 12 – 15 companies of that list receive a “Cherry” investment.” 

We placed value on the people, not the company or the product. We’re looking for visionaries—people who want to expand their start-up limitlessly and irrespective of timeframes. People who want to create revolutionary technologies that could shape and forever change society and the world as a whole. And in addition to having a vision, they need to have an unmatched drive to be successful, an operative plan for turning their vision into reality, and a clear idea for how to achieve their goal.

At Cherry, we have the goal of financing Europe’s first trillion-dollar company—and we know that means finding entrepreneurs who understand that high rewards come with high risk.

Many people are of the impression that Europe, despite being home to some exceptional entrepreneurs and business ideas, is struggling to compete against its American counterparts on the international market. Why is that, and how can things change?

Filip Dames: I don’t buy into all the negativity surrounding Europe. We have offices in Berlin, Stockholm, and London, and our portfolio comprises start-ups from all across the continent. I’m particularly optimistic about the future of the technology sector in Europe: We have the knowledge, the experience, the capital, the talent, the research, the diversity, and the tech hubs. What we lack, however, is global ambition. The whole technology ecosystem has to start thinking bigger. That also means that, if we truly want Europe to be the world’s best location for founding a tech company, a lot of things will have to change in certain areas, for example, occupational mobility, the costs and processes surrounding entrepreneurship, or even your average workplace culture. With Cherry, it’s our mission to encourage teamwork between policymakers, entrepreneurs, researchers, and investors. And we do that so Europe has a chance to perform on the global stage—and to be successful while doing so.

In your opinion, what are the industries and sectors that, in the future, will offer start-ups the greatest chance to develop?

Christian Meermann: At the moment, everything is trending toward artificial intelligence, of course. But in Europe, our focus is more on where it can be applied as opposed to large language models themselves. We have quite a few companies in our portfolio in this area, including Black Forest Labs, Forgent, Aries, Telli, and Integral. And we’re only at the start of these developments. We’re going to see a lot more AI companies founded over the next few years.

Also, given the current geopolitical climate, deep tech and defense tech are still in focus. And we see exciting innovations coming from these areas.

WHU has its own rather successful entrepreneurial ecosystem. How helpful are such networks in improving a start-up’s chances of being successful?

Filip Dames: Getting a company up and running is nearly impossible when you’re left entirely to your own devices. Networks like that of WHU—which members can access during their company’s development or when they are looking for new hires or investors—are invaluable. It’s impressive to see all the success stories that have come out of WHU, and I’m always excited to hear from other alumni and learn about their thrilling projects.

Christian Meermann: WHU’s network was immensely helpful to us when we were starting Zalando, and again when we started Cherry. And it’s incredible that the network is now putting its current generation of entrepreneurs into contact with us and other investors. You never know who to rely on in this process, so it’s even better when these connections to WHU bring about new possibilities.

Thanks for the chat, and we wish you a lot of success for the future.