Klaus Hommels has so far had a flair for spotting internet trends. Now the 39 year old is bringing Xing, the contacts site for Managers, to the stock exchange

Many young people want to be football stars, others want to be car mechanics and some journalists. But for Klaus Hommels there was never any question want he wanted to be: “I always wanted to be an Equity-Investor", he says. Since he was as young as 14, his grandmother gave him money so he could invest in shares. Since then he has clearly discovered a more lucrative type of investment: Venture Capital, also known as risk capital. The 39 year old German can even claim the title “Entrepreneurial (corporate) private investor 2006“

He has earned this title because he has kept his faith in what, at the turn of the century, was known as E-Commerce or B2C. In the year between the bursting of the dotcom bubble and the new euphoria over the “web 2.0“, he has been continuing to invest privately undeterred and has recognized the right trends. His direct hit was the internet telephone company Skype, which the online auction house eBay purchased at the end of last year for 4 million dollars.

Now his investment in OpenBC, which has been relabeled as Xing, the contact site for Managers, stands before its initial public offering. Today the price range for the shares will be announced. On Tuesday the sale will begin. By Thursday at the earliest it is planned to debut in the stock market on the heavily regulated Prime Standard segment of the Frankfurt stock exchange.

The success of his private investments has brought Klaus Hommels, who lives with his Swedish wife and 4 children in Switzerland, professionally to London. The US venture capital company Benchmark Capital attracted him as a partner for the European team, after running into him on several deals. Benchmark is somewhat of an orientation point in the international venture capital market. The company has been the investor behind AOL, eBay, Handspring and many other IT and internet companies.

So Hommels sits in his simple, modern office in London, just a few steps form the consumer Mecca Selfridges on Oxford Street. From here he logs into his network of contacts, who he also sees on his many trips in Europe, in order to discover lucrative enterprises. Moreover he regularly reads blogs about the internet scene and tracks the statistical trends in the movement of internet traffic.

The man with blue eyes behind round glasses and unruly, wavy hair is no E-commerce preacher. In fact, dressed down, he is more of a down to earth, analytical type. He listens and even makes the occasional pause for thought in conversation. And he does not relinquish much information about his private life.

He oversees around five businesses for Benchmark over the life of a fund. He described his work: “We are something like an outsourced service provider for business development. So it is not just about the money – that is available for really good founding teams somewhere else too. It is about the connections.”

“Klaus has always been very involved, and he really helped me in the early years as a founder and Chief Executive Officer“, says Niklas Zennstrom, who with Skype has become very rich.
“He brings a wealth of experience with him and the connections with which to find and build the internet success stories of the future“, says Johan Brenner, General Partner of Benchmark.

Hommels likes the mode of operation of the company, which has its roots in Silicon Valley. “We have a quasi socialist structure, everyone has the same incentives. That promotes team work." It is only when all have been convinced by an idea do the partners invest.

On the scene Hommels had already made his name as a manager with Bertelsmann, AOL and Freenet. “He is one of the veterans of the German internet scene, also during the difficult years he believed in the potential of the medium“, says Frank Boehnke, General Partner with the renowned Munich based venture capital company Wellington Partners. “Hommels is an exceptional figure, one who always thinks ahead“, praises his competitor, with whom he is working together as an investor in Open BC/Xing.

And the forward thinker Hommels, who operates from the venture capital centre of Europe, London, sees many new internet trends coming from Asia. “Asian internet firms will emerge as company buyers in five years time" Hommels forecasts Hommels. Three years ago he had already visited China in order to make contact with the young entrepreneurs. “I was the token European there" he points out with a smile.

It was not actually that difficult to come across the right people. “The Chinese entrepreneurs will make an appointment to see you out of curiosity, even when they don’t know who you are – they don’t know yet how important they are,” he says. In China internet platforms are particularly interesting because of the end consumer. The sheer size of the market makes it lucrative, even when you only bring in a small proportion of customers.

Also, in his opinion, Eastern Europe has been neglected by investors. There a succession of teams which have grown into 10-man companies. Here the combination of technical expertise and business thinking is often lacking. This he sees as being particularly common in Sweden – so it is no accident that this is where Klaus Hommels has invested the most.