Status: 01/13/2022 10:19 a.m.
German start-ups experienced a financing boom in the past year. Young companies in particular benefited from the willingness to invest, taking advantage of the digitalisation boost in the pandemic.
Newly founded young companies in Germany received more venture capital last year than ever before. With around 17.4 billion euros, the start-ups were able to collect more than three times as much money as in the Corona crisis year 2020. This is the result of a new study by the consulting company EY.
Accordingly, the number of financing rounds rose by 56 percent to 1160 and thus also reached a new record. Above all, the number of large investments with a volume of more than 100 million euros “literally exploded” from eight to 33 in the previous year. More and more start-ups are getting fresh money and the sums are rising rapidly, said EY partner Thomas Prüver: “In addition, there is high investment pressure on the investor side. There is a lot of money in the market – this is currently benefiting promising young companies. “
Corona strengthens the tech business
Most of the venture capital went to young firms in the finance, online trading, and software industries. “The pandemic is increasingly proving to be a catalyst for a start-up financing boom,” said Prüver. Start-ups with their mostly technology-based business models have benefited from the fact that digitization has received a boost in the pandemic. “Young companies are often highly innovative and often have the potential to drive the digital transformation of the German economy with their solutions and thus act as innovation drivers,” says the EY partner.
The largest transaction in Germany took place in September and was a cash injection of 861 million euros for the Berlin delivery service Gorillas. Customers can order groceries and other supermarket items from the provider using an app, which will then be delivered to their home at short notice. The Munich software provider Celonis, the smartphone bank N26 and the broker Trade Republic also received large investments. In total, EY counted eight financing rounds with more than 500 million euros. In the previous year there was not a single one of this magnitude.
Berlin and Bavaria are ahead as locations
By far the most money was collected by founders in Berlin, followed by Bavaria: of the ten largest investment rounds in the past year, seven were in Berlin companies and three in start-ups based in Bavaria. “For the other startup locations, however, it is difficult to keep up,” said the EY partner. Because while the average investment amount per financing round was 21 million euros in Berlin and 19 million euros in Bavaria, founders in Baden-Württemberg and North Rhine-Westphalia were only able to collect an average of around eight and six million euros respectively.
Start-ups are dependent on investors, as they usually do not initially write any profits. Funds and large companies invest capital in young companies in the hope that their business ideas will prevail. They are seen as a driver of innovation for the economy. However, the number of self-employed people in Germany has been falling for years. And when it comes to financing and going public for start-ups, Germany lags far behind countries like the USA and Great Britain.