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Otto investing EUR 85 million in group's start-up scape

Otto Group Digital Solutions funding business models in logistics, e-commerce and fintechs

The Otto Group has set EUR 85 million aside to found start-ups across the group and boost “Corporate Company Building” by the Otto Group Digital Solutions (OGDS), a press release said Tuesday (February 6, 2018). OGDS will focus on trade-related start-ups to help shape the Otto Group’s digital future. Two to three new business models with emphasis on logistics, e-commerce and fintech will be set up every year.

Using advantages of group’s structure

Paul Jozefak, Managing Director of Otto Group Digital Solutions, said: “We solve the challenges of digital transformation with the advantages of a start-up and by connecting them to Otto Group’s strategic assets. This model gives us a clear, competitive edge. Unlike external start-ups, we can use the advantages of the corporate structure to test our ideas quickly and to accelerate the growth of our start-ups immensely.” OGDS develops the Otto Group’s core business and has subsidiaries in the service sector.

Business models for digital future

The collectAI start-up, for instance, provides artificial intelligence-based collection services to help its clients manage account receivables. Founded in 2016, the fintech is the first digital end-to-end provider and has managed EUR 40 million in receivables. Another start-up, Risk Ident, is a provider of offers anti-fraud software to companies in the e-commerce, telecommunications and financial sectors. Last year alone, Risk Ident secured transactions in the double-digit billions for clients. BorderGuru, which is now part of the Hermes Group, offers a full-service solution for brands and retailers to deliver internationally from their web-shop or via marketplaces. In 2017, BorderGuru earned EUR 10 million in annual turnover.

The Otto Group has founded more than ten spin-offs and pioneering company-owned incubators. The budget and strategic company building will allow the Otto Group to continue on its the successful course.

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