Drafted 11 November 2023, updated 1 July 2025
Dieter Schwarz ‘s vision becomes very clear in 2024. You will find it at the end of the article, with some figures from the Lidl giant he founded and continues to lead.
The owners of supermarket chain Lidl are among those investing more than $500 million in German artificial intelligence start-up Aleph Alpha as it seeks to capitalise on a global run in the sector. Schwarz Group, which controls Lidl and is building a new IT division, is co-leading the deal with an artificial intelligence hub based in the city of Heilbronn, south-west Germany, which was jointly set up by a foundation established by Lidl founder Dieter Schwarz.
Other investors include the venture capital unit of Bosch, Europe’s largest automotive parts supplier, according to a statement from Aleph Alpha. Founded in 2019, Aleph Alpha is among the most prominent European start-ups focusing on generative AI, software that can create sophisticated text, images or computer code that mimics human capabilities.
But the German start-up may struggle to break through in an increasingly crowded generative AI market, with better-funded competitors such as OpenAI, backed by Microsoft, Google and Facebook’s parent company Meta, investing heavily in the space.
Aleph Alpha, which employs around 70 people, aims to distinguish itself by offering data protection, security and transparent software to customers in sensitive sectors such as law enforcement and healthcare. It has already raised around EUR 28 million. “We need to make sure we have a hand on the wheel of how the future will turn out,” Aleph Alpha’s CEO Jonas Andrulis told the Financial Times. The company’s customers ‘have full sovereignty over what is happening’.
About a quarter of the funding comes from an equity investment, while the rest is made up of research grants and joint business development commitments that will not dilute shareholders, people familiar with the deal said. They added that Aleph Alpha’s capital would be valued at about EUR 500 million in the transaction. The company did not disclose its valuation.
Schwarz Group, an unlisted, family-controlled giant with annual sales of 154 billion euros and 575,000 employees worldwide, is best known for its Lidl discount supermarkets. But it has also branched out into food production, recycling and IT services.
In September, it merged its cloud and IT security offerings into a stand-alone unit, Schwarz Digits, which serves the rest of Schwarz’s operations and external customers. Dieter Schwarz in 2023 supported theHeilbronn hub, Innovation Park Artificial Intelligence, also funded by the state of Baden-Württemberg and aiming to become the largest artificial intelligence cluster in Europe.
“Liquidity is necessary, but not sufficient,” said Andre Retterath, partner at venture capital firm Earlybird and board member of Aleph Alpha. The partnerships will give the company “access to processing, access to talent and distribution in the market,” he said.
Earlybird led a funding round in 2021 for the German start-up. Aleph Alpha wants to accelerate its expansion as it envisages a window in the next 12 to 24 months during which companies will test and select the artificial intelligence software they want to use. While some of Aleph Alpha’s competitors have developed close corporate relationships with larger technology groups, the company emphasised that it is independent.
Other investors in the consortium include IT company Hewlett Packard Enterprise and German software company SAP, as well as VC group Burda Principal Investments and existing backers. The company was previously backed by VC groups UVC Partners, LEA Partners, 468 Capital, Cavalry Ventures and Lakestar.
2024 : starting with a system created for internal use in 2021, Schwarz Group, owner of Lidl, now offers cloud computing and IT security services to third-party corporate customers.
Last year, the unit generated EUR 1.9 billion in annual sales and employs 7,500 people.
Meanwhile, by 2022, its global turnover in 2023 had risen to EUR 167.2 billion in annual sales. And in Northern Italy it has not finished expanding: Lidl grows by 60% in area 1
Read also :
Schwarz Group (Lidl) expands into FMCG production
N.B. : You can be young in approach even if you are elderly: Mr Dieter Schwarz – below – is 84 years old.
