By James Williams 17th August 2023

Maximilian Winter, the grandson of Fritz Winter, who founded one of Germany’s biggest foundries in 1951, the Fritz Winter Eisengiesserei, sees space technology infrastructure as a big growth opportunity. 

Speaking to Family Capital, Winter says space tech could grow from $350 billion today to more than $1 trillion by 2030. And he’s busy helping launch new start-ups via VC firm Harmonix, which Winter set up to expand the Winter family office portfolio.

“We decided to diversify the family portfolio beyond the core business and public equities, and six years ago, I started spearheading the VC portfolio. We’ve done fund-of-fund and direct investments and then decided to establish Harmonix as a standalone,” he says.

The journey towards space tech investing began when Maximilian Winter was diagnosed with Lyme disease in October 2013.

Harmonix’s current portfolio totals more than $40 million of assets under management, and has, in recent weeks, launched its third fund. The first fund consisted of Winter’s own capital. It did well, and the family office anchored the second fund while also accepting external capital for the second fund, which launched in 2021: primarily from family offices and HNW investors. “Now, with Fund III, we will be institutionalising the LP base,” says Winter.

Fritz Winter is a supplier and partner for the global automotive, commercial vehicle and hydraulic industry. Its foundry develops and manufactures rough and finished part components and complex system components. It is today one of the world’s largest independent foundries.

It all started in 1932, when, at the age of 22, Fritz Winter took over the iron foundry for the production of railroad parts from his father, who went bust during the Weimar Republic. After going bankrupt, the business was reborn as an auto parts producer, which the Russians expropriated at the end of the Second World War. Down but not out, Winter reformed the company in West Germany in 1951, and seventy-two years later it is still going strong.

Located in Stadtallendorf, a small town 60 miles north of Frankfurt, it counts another prominent family business as its next-door neighbour: a large chocolate factory operated by Ferrero Group, one of the world’s largest sweet/confectionary companies originally founded in Alba, northern Italy by brothers Pietro and Giovanni Ferrero.

The journey towards space tech investing began when Maximilian Winter was diagnosed with Lyme disease in October 2013.

“I was able to cure myself and as part of my journey I did a lot of research on the gaps and opportunities in healthcare and life sciences, which remain a core focus (approx. 80%) of the Harmonix investment strategy. Deep tech critical infrastructure, particularly space tech, is another promising high growth sector that the research surfaced, and just like patients needing healthcare, governments andindustry can’t do without critical infrastructure, especially when it’s relevant to national security,” says Winter.

Its first two funds saw it invest in a wide range of innovative companies, including Insilico Medicine (AI for drug discovery) and Volumetric, which does 3D printing of human organs in line with a patient’s immune system. By natural extension, it then began to pursue ‘deep tech’ as an investment theme, which makes up its space tech portfolio sleeve.

“We’ve already made a few space tech investments. One of these is Atlas Space Operations, which connects satellites to ground-based control systems using a federated network.

“Another company is Loft Orbital, which did the first ride share to outer space. They can fit multiple payloads on the same satellite bus, and because they use quantum bit encryption, they can support government and commercial payloads. They are also reducing the time to launch by removing non-recurring engineering costs,” comments Winter.

One of its other investee companies is Momentus, which provides an in-space transportation solution using water plasma engine technology.

The common thread that links Harmonix’s healthcare, life science, and space tech portfolio is that there is typically a data-driven deep tech platform behind its respective investee companies. Its ongoing mission is to seek out companies that are developing breakthrough science.

“Of course, there is a difference between doing computational work for drug development and treatment option recommendation compared to space tech, but a lot of it is using technology to speed up the R&D cycle and become more efficient at reaching goals, regardless of whether it is healthcare or space tech,” says Winter.

Whilst Winter was fully recovering from Lyme disease, he became increasingly aware of the benefits of merging computation and data integration to remove information silos in healthcare and life sciences.

“On the infrastructure side, I saw a whole range of next-generation technologies emerging.” He adds: “Space tech is a big part of everything from satellite production to ground communications, telecommunications, and other infrastructure elements.”

Its first two funds have generated top-decile and top-quartile performance, returning 3.7x (2019) and 1.5x (2021), respectively. The third fund launched in July this year.

Just as Winter has seen the real-life benefits to patients through its various healthcare investments, “which is very gratifying,” he also believes that space tech infrastructure also has the potential to improve people’s quality of life, whether that is supporting the wider adoption of autonomous vehicles, or giving remote communities better access to the internet:

“We are also investing in software used in space infrastructure, such as satellite imaging for agriculture to predict and manage wildfires. In life sciences, companies are developing drugs and testing in space to take advantage of zero gravity. That is another interesting area for us.”

Harmonix has co-invested with over 250 investors, including VCs, individuals, and family offices. The fund offers a co-investment programme to invest alongside Harmonix via special-purpose vehicles. Winter and his team plan to continue to build out this programme. The team, which includes Krish Ramadurai, an alumnus of Harvard and a Harvard-MIT think tank who worked under Nobel Laureate economist Michael Kremer, has relationships with other VC managers and academic labs, government agencies, and incubators.

“We’ve been focusing more on fundraising in the last 12 to 18 months as we’ve noticed VC investors were protecting their portfolios and doing follow-on rounds but not necessarily doing a lot of new deals. We have built a wide network of coinvestors, and five to 10 of them have been the bedrock of what we’ve done so far,” says Winter.