In a gray-walled conference room on the outskirts of the medieval Bavarian city of Nördlingen, the Austrian billionaire Michael Tojner is toying with a tiny battery. The coin-sized device is a technological wonder. Measuring just half an inch around, the gizmo packs a hundred times more energy than a household battery ten times its volume, can fully recharge in just 15 minutes and can last five hours on a single charge. A much earlier version powered Neil Armstrong’s camera during the Apollo 11 moon landing. Some of the modern ones famously power Apple’s popular AirPod Pro wireless headphones, - Forbes reports.
The batteries are also a financial wonder. Tojner bought Varta, the company that makes them, for just $40 million in 2007. Two and a half years ago, the serial entrepreneur and venture capitalist floated the company on the Frankfurt Stock Exchange; it now has a market cap of $2.8 billion. Commerzbank estimates that Varta has a more than 50% market share for premium wireless headphone batteries, which boast extraordinary 40% margins.
AirPod Pro sales along with deals with Samsung, Jabra and Sony drove Varta’s revenues up 34%, to $400 million, in fiscal 2019. Tojner’s 56% stake plus his investment success—the Austrian press calls him “Mr. 300%”—have landed the 54-year-old father of six on the Forbes Billionaires list for the first time.
“With microbatteries, we became the clear market leader in a segment which is growing at probably 50% to 60% per year,” Tojner says. “In ten years, no one will have a phone without an ear application. There is enormous potential for growth.”
billionaire Quandt family—best known as BMW’s most powerful shareholders—acquired most of the company. Nearly a century later, with the pharma and chemical business long since spun off, Deutsche Bank and the Quandt heirs were selling off the pieces. Rayovac and Johnson Controls bought most of the battery business, but the tiny microbattery business was the last to be sold.
“I was the only bidder left for Varta because nobody dared to buy Varta,” Tojner says. “They sold me a company with negative cash flow. But everything was supposed be better because we had an Apple contract. After one year, one small battery exploded. We lost the Apple contract. The company almost went bust. The bank was nervous, and I was in the restructuring department because we couldn’t pay our interest.”
That exploding Apple iPod Nano battery forced Varta to scrap its $60 million investment into lithium polymer batteries. Tojner and Varta CEO Herbert Schein doubled down on coin-style lithium-ion batteries, automating production to fend off low-labor-cost Asian competitors and spending on research to significantly boost power.
Longtime Varta board member Sven Quandt says his family considered bidding, but it took Tojner to transform the small company into a world leader. “These companies were in a big business group,” he says. “People were not so focused on profits, on reliability, on how to grow the company. Michael is a driver.”
The high-tech realm of microbatteries and lucrative Silicon Valley contracts is an unlikely perch for a peripatetic entrepreneur who got his start selling ice cream to tourists.
