Social chain insolvency: After the lion's bankruptcy: How Ralf Dümmel fights for his company and his life's work

The broadcast of "Lion's Cave" has been one of the highlights of the year for deal king Ralf Dümmel since 2016.

Social chain insolvency: After the lion's bankruptcy: How Ralf Dümmel fights for his company and his life's work

The broadcast of "Lion's Cave" has been one of the highlights of the year for deal king Ralf Dümmel since 2016. But the new episodes, which can be seen on Vox from Monday, should feel emotionally difficult for the busy entrepreneur. On television, Dümmel then sees the celebrated investor, to whom the hearts of the founders fly, while the same Dümmel feverishly tries behind the scenes to glue together the pieces of his own company empire. "He's fighting for his life's work," reports someone close to the star.

Because the biggest deal of the lion and crowd favorite has recently turned out to be a spectacular flop. Georg Kofler's Social Chain AG, which took over Dümmel's DS Group two years ago with big plans, filed for bankruptcy at the end of July. As a financially independent subsidiary, the DS Group itself is not affected by the bankruptcy, stresses Dümmel. But how exactly the company will continue, which also takes care of all of Dümmel's "Lion's Cave" holdings, is currently open.

After weeks of radio silence, Dümmel gave insights into his emotional world via Instagram on Thursday. The entrepreneur confessed that the bankruptcy of the social chain had hit him hard. "I had to understand that the sale of the DS Group to Social Chain AG did not bring the desired success. I am very aware that this decision brought disappointment and disappointment to everyone who believed in us - shareholders, partners, employees caused a lot of stress - this responsibility weighs heavily on me." And further: "Personally, I struggle a lot with the fact that I have disappointed many people whom I have infected with my enthusiasm."

Now Dümmel is struggling to be able to continue running the DS Group - "my baby" - despite the bankruptcy of the parent company. "We fight day and night. We are working on solutions. We have a plan!", says Dümmel. According to stern information, this plan means that Dümmel wants to buy back the DS Group from the insolvent parent company. "Ralf will make an offer, but everything is still in the process," says insider circles. There are other interested parties as well.

Officially, the social chain is currently looking for investors to restructure the insolvent company in a "neutral and competitive process". The search for investors is focused on the DS Group as "the most valuable investment within the social chain," according to a statement. Initial talks with interested parties have already been held. In addition to the insolvency administrator, the management consultancy and auditing company Deloitte is also involved in the process.

It seems unlikely that a foreign investor will take over DS without including the face of the company. Nevertheless, the situation for Dümmel is unfortunate. At that time, Dümmel had received a large part of the purchase price for DS in the form of shares in the social chain – and they are now worthless. Most recently, Dümmel and other former shareholders of the DS Group had granted the social chain a mass loan to ensure the continued operation of the parent company. The bottom line is that Dümmel lost more than he gained from the social chain deal, says an insider.

Dümmel and Kofler met through "Die Höhle der Löwen", in which both appeared as investors at times. Dümmel's DS Group, based in Stapelfeld near Hamburg, has been well represented in the stationary retail trade for many years with its products - including above all promotional goods for discounters. Founded in 2014, Kofler's Social Chain focused on e-commerce and social media. The "Marriage of the Lions" should unite both worlds.

In October 2021, Social Chain acquired DS Group for €220 million, with DS shareholders receiving €100 million in cash and the rest in Social Chain shares. DS managing director Dümmel moved into the board of directors of the merged company. Shortly after the deal, Social Chain AG was promoted to the Prime Standard of the German Stock Exchange. The company employed 1,400 people, generated sales of around 600 million euros and was worth more than half a billion on the stock exchange. Kofler was already dreaming aloud of a billion dollar valuation, and according to the plans at the time, the billion should also be cracked in the 2023 financial year.

Instead, the stock price plummeted, fast and hard. Because instead of growing business, the company recorded a decline in sales. At the end of 2022, the social chain announced a massive austerity program including job cuts and a change in management. Main shareholder Kofler himself took over the chair of the social chain from Wanja Oberhof. Dümmel gave up his board position in the social chain and once again concentrated solely on the DS Group. But even these changes brought no change: At the end of July, the social chain was financially dead. With the move to the insolvency court, Kofler also resigned from his post as CEO.

While Dümmel is fighting for the future of his company in the background, he would like to focus on his social media channels in the coming weeks on the new episodes of "Lion's Den" - which were already recorded in spring. "The start-ups deserve to be the center of attention and I want the greatest possible success for everyone, regardless of whether it's a deal or a no-deal and regardless of which lions made the deal," says Dümmel.

After all, he will not be seen in the TV studio next to his partner Kofler, who left the show as an investor last year. For Dümmel, on the other hand, it means: The show must go on.

Note on transparency: Like Vox, Stern is part of RTL Germany