study
German start-ups at the forefront when it comes to financing in Europe
An employee of the Gorillas food delivery service in Berlin. Photo: Wolfgang Kumm/dpa
© dpa-infocom GmbH
Growth companies from Germany have moved onto the radar of large investors. In a European comparison, local start-ups do well with large cash injections. However, weaknesses remain at the start-up location.
According to a study, German start-ups have caught up in a European comparison and are among the leaders when it comes to large-scale financing.
Half of the ten largest injections of money from investors in Europe in 2021 went to local growth companies, according to a survey by the auditing company EY. “This is a strong signal for the relevance of the German tech ecosystem in an international comparison,” said EY partner Thomas Prüver. Germany has broken away from France.
However, British start-ups received the most venture capital in Europe with 31.4 billion euros, the published analysis shows. Germany followed with a record figure of EUR 17.4 billion (up 229 percent) and strong growth in the number of financing rounds, ahead of France (EUR 11.6 billion).
With a financing volume of almost 10.5 billion euros, Germany’s start-up metropolis Berlin made it ahead of Paris (9.3 billion). London remained unchallenged, where start-ups collected 20.3 billion euros from investors. Munich was in fourth place (4 billion).
In the largest deals in Europe, the British veterinary group IVC Evidensia was ahead with financing of almost 3.5 billion euros. This was followed by the Swedish battery start-up Northvolt (2.28 billion) and the British Constellation Automotive Group (1.15 billion). The Berlin delivery service Gorillas came in fourth and fifth with a cash injection of 861 million euros and the Munich software developer Celonis (830 million). The smartphone bank N26 and the online broker Trade Republic (both Berlin) and the electric charging station operator Ionity (Munich) were also in the top ten.
Overall, the financing volume in Europe more than doubled (+141 percent) compared to the previous year to EUR 88 billion. After a setback in the pandemic, investors’ money is loose again, and after years of low interest rates there is a lot of liquidity in the market. Prüver spoke of an “enormous investment pressure” on investors.