A “pandemic of the century” has “thrown the world markets and many national economies into the unknown,” explains the nobleman from the principality, who is his main job ambassador to the Vatican. According to Handelsblatt information, the company has laid off 29 employees, almost half of the remaining workforce.
But that has only to do with the pandemic to a limited extent. The company, founded in 2018 by the medical graduate Wolfgang Haupt, has become as famous as it is notorious in the Amthor affair. Whenever Haupt had to explain his business model, he boasted of artificial intelligence, voice and face recognition. A German Palantir seemed to emerge or even a Google.
With such promises, the company has raised $ 34.5 million – including from unsuspecting investors. This is shown by documents that are available to the Handelsblatt and discussions with numerous ex-employees and investors.
Much of the money now seems to be wasted due to a lack of strategy and a presentable product. After four boss changes, a takeover that caused many problems, and the loss of numerous employees and powerful friends, the company is looking for money again.
Where to take and not to steal? On the list of 40 investors, dated June 8th, there are no venture capital funds and virtually no AI expertise. As a rule, start-ups want to have as few co-decision-makers as possible, but those who know their way around. Augustus’ list makes it appear that Haupt and his influential friends have phoned their Rolodexes.
The private bank heir and AfD donor August François von Finck put 11.4 million US dollars in Augustus, Stefan von und zu Liechtenstein around five and Karl Theodor zu Guttenberg (CSU), once Federal Minister of Economics and Defense, 1.7 million dollars .
Two siblings from the Swarovski clan were there with amounts in the millions, ex-Bild editor-in-chief Kai Diekmann with a little over $ 100,000. A German professor and ex-government official put almost half a million dollars in Augustus; he knows Haupt privately.
For some it was play money, for some it was a lot of money. The investors were apparently promised “Something with AI”: One talks about data centers, another about autonomous cars. It should also have been about an “app store for AI applications”.
One possible reason for the operational problems: Despite a completely unclear business model, the founders gathered numerous German political and economic giants around them – some with a dubious reputation and without experience of running a start-up.
Karl-Theodor zu Guttenberg
The former Federal Minister of Defense was temporarily “Chairman for General Affairs” of Augustus Intelligence.
Karl Theodor zu Guttenberg was temporarily “Chairman for General Affairs” of Augustus Intelligence. Ex-Roland Berger boss Charles-Édouard Bouée called himself “Chairman of Business Affairs”. Ex-BND boss August Hanning and ex-constitution protection chief Hans-Georg Maaßen also belonged to the circle around founder Wolfgang Haupt.
Philipp Amthor, a CDU member of the Bundestag, was even an active politician who was the company’s director – rewarded with the option to purchase Augustus shares, which were worth $ 250,000 at the time of issue and which should increase in value.
Amthor used Bundestag letterhead to ensure that Haupt and co-founder Pascal Weinberger received appointments at the Ministry of Economic Affairs. In a WhatsApp group, they exchanged private messages with Federal Transport Minister Andreas Scheuer (CSU).
Supporters are now turning away: Guttenberg, Bouée and Amthor left the company in the summer. After the “Spiegel” questioned Amthor’s role, the 28-year-old called the engagement a “mistake” and gave the options back.
Founders with no apparent AI experience
However, many questions remain open to this day – such as how the unknown US start-up gets millions from Amthor’s constituency. The KRC Beteiligungen, behind which the entrepreneur Klaus Keunecke from Strasburg in the Uckermark stands, has invested almost 1.7 million dollars in Augustus.
Did the member of the Bundestag attract a major investor to the Augustus founders? Liechtenstein told the “Neue Zürcher Zeitung” that he was very involved, even when it was “about discussions with investors”.
And the relationship can be traced: In December 2019, the member of the Bundestag spoke about rent policy at a reception given by Keunecke’s real estate appraisal office in Berlin. In the 2017 federal election campaign, the CDU young star visited the Keunecke Gutsverwaltung in Strasburg. Those affected did not respond to questions.
Prince Stefan of Liechtenstein was convinced by Haupt himself. Through his family’s Valnon Holding, he invested two million dollars, personally with 100,000 dollars. In May 2020, the holding is said to have injected another three million dollars. The nobleman does not want to say anything about the investments.
The CDU MP has campaigned for the start-up Augustus Intelligence.
(Photo: Philipp Spalek / laif)
Liechtenstein got to know Haupt when the student invited the then ambassador of the Principality to Berlin to give a lecture at his university. They kept in touch. Later, the young entrepreneur Haupt sold a mobile fitness device with the company Active Cross, which was supposed to simulate skiing. Liechtenstein still has two of them today. The company went bankrupt in 2016 after major US commercialization plans failed.
Haupt had no experience with AI start-ups, nor did he have a discernible strategy for it. Even so, his company received nearly $ 35 million at a valuation of over $ 250 million. For comparison: Facebook received $ 12.7 million in the first round of funding with a valuation of just under $ 100 million.
Liechtenstein regards the unclear goals as uncritical. “Trends in the field of artificial intelligence develop faster than handbags go out of fashion,” he says. If you make business plans in this area, you have to be very quick. “It’s like driving in fog: you suddenly see opportunities – and bang – the competition has already implemented them.”
Prince Stefan from and to Liechtenstein
“Trends in the field of artificial intelligence develop faster than handbags go out of fashion”
(Foto: picture alliance / obs)
Might be. But instead of working on opportunities, Augustus polished the facade. Other start-ups start in the garage, Augustus moved into the One World Trade Center in New York. The lease should run for more than four years.
Business plans apparently changed depending on the weather: Liechtenstein told the “NZZ” in August that it was considering building a data center in Amthor’s home town of Mecklenburg-Western Pomerania.
Because Augustus still had no products, customers or sales in mid-2019, the start-up bought two companies: XBrain, which develops chatbot software for customer service, and Moblty.
“I don’t even know who cheated on whom more”
The company sold smart screens for retail branches, and its well-known customer was the US pharmacy chain CVS. “The ‘make or buy’ principle applies to technology companies,” explains Liechtenstein about the takeovers. “With the companies we have brought highly talented technicians into the company.”
And a lot of problems: “I don’t even know who cheated on whom more,” says a former Moblty executive. The start-up had consumed around 30 million dollars from investors since it was founded in 2012, and according to employees, the company fell behind with the payment of salaries in 2019.
Augustus only paid Moblty’s investors out with shares in a sub-holding that Augustus controls. However, a contract shows that the new owner had to put $ 2.5 million into the holding at the beginning because the business burns money so quickly.
Augustus did not answer questions about this. Acquisition and installation of the displays equipped with cameras cost more than the start-up earned. “The Augustus management would have found out with a minimum of due diligence,” says the ex-Moblty employee.
To date, however, almost every dollar of August sales comes from the unprofitable operation of the screens, Moblty’s former investors complain in a letter.
The well-networked top consultant was temporarily at the helm of Augustus.
(Photo: Thomas Dashuber for Handelsblatt)
At the request of the Handelsblatt, the company cannot present new customers, although the well-networked top consultant Bouée and his ex-Roland Berger colleague Anne Bioulac were at the top for a time. After all, when Augustus pitched his chatbot software to a CVS subsidiary, Google and IBM made it to the last round, the company explains.
This Wednesday, the fifth CEO started in less than six months, New York investor Arya Bolurfrushan. Ten of the eleven-strong management team in a company presentation from September 2019 were fired or left. Two of them are suing the company for making false promises – an arbitration process is ongoing.
The remaining founder Wolfgang Haupt has stepped aside as boss. As the majority owner, he still has great power with Augustus. “In my opinion, you shouldn’t separate a founder from his start-up without good reason,” says Liechtenstein.
But the 34-year-old has brought the start-up closer to the secret services through his contacts with Maaßen and Hanning. This doesn’t make it easier to market the cameras to retailers. Such quarrels plunged Augustus into a deep crisis: while the start-up had 94 employees in the spring, there are now only 34.
In September, those who remained were said to have learned in an all-hands meeting that Augustus was looking for investors again to improve the financial situation. “AI has solid financing and is well positioned after the restructuring,” the company comments on its financial situation. “This made the runway longer.”
Prince Stefan von und zu Liechtenstein is optimistic about finding investors in the foreseeable future – when calm returns.
More: Amthor’s stock options would have been worth up to $ 250,000.